Shriram Finance Limited has informed the Exchange about Credit Rating - ICRA Limited ( ICRA ) has placed the Company s Long-Term Rating on Watch with Positive Implications
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ICRA has placed Shriram Finance's long-term rating of [ICRA]AA+ on 'Watch with Positive Implications' for its Fixed Deposit and Non-Convertible Debenture programmes. The watch follows the board's approval on December 19, 2025 to raise Rs. 39,618 crore of primary equity from MUFG Bank Ltd through a preferential issue, giving MUFG a 20% stake (subject to shareholder and regulatory approvals, expected to close in 2026). ICRA views this infusion as significantly strengthening the company's capitalisation, lowering managed gearing from 4.0x to a pro-forma 2.5x, and reducing its cost of funding. The watch will be resolved once the MUFG transaction concludes, which would likely lead to a rating upgrade. The rating continues to factor in SFL's leadership in preowned commercial vehicle financing (AUM of ~Rs. 2.81 lakh crore, 2nd largest NBFC by AUM) and improving asset quality (gross stage 3 at 4.6% as of Sept 2025 vs 5.3% a year ago).
Positive signal for shareholders — the rating watch is a step toward a likely upgrade once the Rs. 39,618 crore MUFG equity infusion completes in 2026, which would lower gearing, cut borrowing costs, and boost growth capacity. However, the rating itself has not changed yet, and if the MUFG deal fails to materialize, the positive watch could be reversed.