Shriram Finance Share Price Update: Stock Market Today Insights

Market Performance

Shriram Finance shares witnessed a decline of around 2% on December 26, ending a six-day upward streak. The stock slipped to Rs 957.30 per share in Friday’s morning trade, following a sharp rally that had lifted it to a 52-week high of Rs 983.7 on Wednesday.

The recent dip is attributed to profit booking as investors booked gains after the stock’s notable surge of 16% over six sessions.

Main News: MUFG Stake Acquisition Boost

The recent market momentum for Shriram Finance was largely driven by a landmark investment deal. On December 19, the NBFC announced that MUFG Bank would acquire a 20% stake in the company for Rs 39,600 crore ($4.4 billion) through a preferential allotment of equity shares.

Key details of the deal:

• Floor price for preferential issue: Rs 840.83 per share
• Total shares to be acquired by MUFG: 47.11 crore equity shares
• The deal stands as the largest FDI India’s financial sector has ever seen.

Company Details: Shriram Finance at a Glance

Shriram Finance is India’s second-largest non-banking financial company (NBFC), after Bajaj Finance Ltd. The company has a strong presence across both urban and rural markets, offering financing solutions for:

• Commercial vehicles
• Tractors
• Passenger cars

Following the MUFG investment, the company is expected to strengthen its balance sheet while retaining its current operational structure.

Statements from Leadership:

• MUFG’s Yasushi Itagaki: The Japanese bank plans to remain a “significant minority stakeholder” and does not intend to increase its stake beyond 20%.
• Umesh Revankar, Executive Vice Chairman, Shriram Finance: The company has no plans to convert into a bank, choosing instead to continue growing as an NBFC. Revankar highlighted that remaining an NBFC allows for customization and flexibility in retail lending and growth strategies.

Shriram Finance Share Price Snapshot

Shriram Finance stock has demonstrated strong performance in recent months:

• 5-day gain: ~11%
• 1-month gain: ~12%
• 6-month gain: ~37%
• Current P/E ratio: 19.09

The stock’s short-term profit booking follows this sustained rally, reflecting investor caution after recent highs.

Summary

Shriram Finance continues to attract market attention due to strategic foreign investment and robust operational presence in India’s lending sector. While profit booking led to a short-term dip in share price, the company maintains a strong position in the market with steady growth in commercial and retail lending segments.

The MUFG deal, being the largest FDI in India’s financial sector, reinforces confidence in Shriram Finance’s market standing, without altering its NBFC structure or growth strategy.

Source: Moneycontrol