Brokerage Gives Bull Call on Shriram Finance Stock after Deal

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The capital infusion in Shriram Finance is expected to materially strengthen capitalisation, potentially aid credit rating upgrade, and reduce funding costs versus peers

By S JHA

Mumbai, December 22, 2025 — Shriram Finance shares gained over four percent on Monday. The stock has gained almost 10 percent within five days, entering a bullish zone per chartists.

ICICI Direct in a research note said that Shriram Finance is now poised for fast growth. The high-beta stock had gained over five percent during the Monday session, extending gains from Friday.

Shriram Finance shares were trading around ₹840 last week. During the day’s session on Monday, the stock had climbed to ₹950. Brokerages have given ambitious targets to the extent of even ₹1250 for the stock in the coming months.

“Shriram Finance’s Board has approved a preferential issue of ₹39,618 crore to MUFG Bank through the issuance of 47.1 crore equity shares at ₹840.93 per share. The move remains subject to shareholder and regulatory approvals,” said ICICI Direct in its research note, adding that a rating upgrade for the stock may also be on the cards.

It stated that “post completion, both MUFG Bank and the Promoter Group will each hold 20% stake in the company. MUFG will gain the right to nominate up to two non-independent directors.” “The agreement further includes a $200 million non-compete fee. The capital infusion is expected to materially strengthen capitalisation, potentially aid credit rating upgrade, and reduce funding costs versus peers,” it added.

The brokerage house also argued that the development is “expected to support accelerated growth and NIM expansion, while strategic partnership benefits can improve technology, operating efficiency and franchise strength.”

Part of the Shriram Group, Shriram Finance is one of the country’s biggest NBFCs, offering credit solutions for commercial vehicles, two-wheeler loans, car loans, home loans, gold loans, personal and small business loans. “The company also offers other services such as Fixed Deposits (FDs) and fixed investment plans. As of September 2025, the company operated 3,225 branches across India and managed assets worth ₹2.81 lakh crore,” added the brokerage.

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)