Shriram Finance Limited has informed the Exchange that Fitch Ratings has upgraded the Company's Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) to BBB- and Short-Term (IDR) to F3
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Fitch Ratings has upgraded Shriram Finance's Long-Term Foreign and Local Currency Issuer Default Ratings to BBB- from BB+, and Short-Term IDR to F3 from B. The ratings have been removed from Rating Watch Positive, with a Stable outlook assigned. This upgrade follows the completion of Mitsubishi UFJ Financial Group's (MUFG) acquisition of a 20% stake in the company for approximately INR 396 billion (USD 4.4 billion). The strategic investment from MUFG provides SFL with a one-notch uplift from its Standalone Credit Profile, improving its capital base with debt/tangible equity ratio improving to 2.5x from 4.2x pre-infusion. Fitch believes MUFG views SFL as a key growth vehicle in India given its franchise in SME and retail lending.
This upgrade to investment-grade BBB- is positive for shareholders as it signals improved creditworthiness, potentially lowering borrowing costs and enhancing funding access. The stable outlook suggests the rating is unlikely to change in the near term.