Shriram Finance Ratings Upgraded by CRISIL Ratings to AAA/PPMLD AAA/Stable
Shriram Finance Ltd saw its long-term credit rating upgraded by CRISIL Ratings Limited. The company’s Long-Term Rating was upgraded to 'Crisil AAA/Crisil PPMLD AAA/Stable,' and it was removed from 'Watch with Positive Implications.' Furthermore, CRISIL reaffirmed the 'Crisil A1+' Short-Term Rating.The rating action was based on the consumption of the proposed definitive agreement between Shriram Finance and MUFG Bank Ltd. Following the completion of the allotment of equity shares to MUFG Bank, which resulted in the latter acquiring a 20% stake in Shriram Finance on a fully diluted basis, the rating action was taken.
The overall ratings reflect the significantly strengthened capital profile of the company. Post the transaction, the net worth crossed Rs 1 lakh crore, and the gearing is estimated to have gone below 2.5 times, up from 4.1 times as on December 31, 2025.
A detailed breakdown of the rating actions is provided in the table below:
| Facility Category | Rating Action/Status |
|---|---|
| Bank Loan Facilities - Long-term Rating | Crisil AAA/Stable (Upgraded from 'Crisil AA+'; Removed from 'Rating Watch with Positive Implications') |
| Bank Loan Facilities - Short-term Rating | Crisil A1+ (Reaffirmed) |
| Rs.80000 Crore Fixed Deposits | Crisil AAA/Stable (Upgraded from 'Crisil AA+'; Removed from 'Rating Watch with Positive Implications') |
| Non-Convertible Debentures (Aggregate) | Crisil AAA/Stable (Upgraded from 'Crisil AA+'; Removed from 'Rating Watch with Positive Implications') |
| Subordinated Debt (Aggregate) | Crisil AAA/Stable (Upgraded from 'Crisil AA+'; Removed from 'Rating Watch with Positive Implications') |
| Commercial Paper | Crisil A1+ (Reaffirmed) |
| Long-Term Principal Protected Market Linked Debentures (Aggregate) | Crisil PPMLD AAA/Stable (Upgraded from 'Crisil PPMLD AA+'; Removed from 'Rating Watch with Positive Implications') |
| Rs.1,190 Crore Non Convertible Debentures | Withdrawn |
| Rs.50 Crore Long Term Principal Protected Market Linked Debentures | Withdrawn |
| Rs.40 Crore Subordinated Debt | Withdrawn |
Financial Indicators and Key Strengths
Shriram Finance reported overall assets under management (AUM) of Rs 2,91,709 crore as of December 31, 2025. The company recorded a net profit after tax of Rs 7,003 crore and a return on managed assets (RoMA) of 3.0% (annualised) during the first nine months of fiscal 2026.The analysis highlights several key strengths contributing to the upgraded rating.
Capitalization and Resource Profile:
The capitalisation remained robust, with networth at Rs 62,093 crore on December 31, 2025. The company's resource profile is diversified, with public deposits increasing to approximately 27% of total borrowings as of December 31, 2025.
Earnings Profile:
The earnings profile shows improvement, supported by merger synergies and stable margins. The net interest margin (NIM; on own book) stood at 8.9% (annualised) in the first nine months of fiscal 2026.
Market Leadership and Asset Composition:
Shriram Finance maintains a market leadership position in the non-banking financial company (NBFC) ecosystem. Its AUM as of December 31, 2025, was comprised of:
- CVs: 46%
- Passenger vehicles: 22%
- MSME: 14%
- Construction equipment: 5%
- Two-wheelers: 6%
- Others: 7%
Used vehicle financing remains dominant, accounting for approximately 83% of the total vehicle loan book.
Asset Quality and ESG Profile
While the company’s gross stage 3 (GS3) ratio was 4.5% as of December 31, 2025, the overall net stage 3 reduced to 2.4% from 2.6% as of March 31, 2025.In terms of Environmental, Social and Governance (ESG) profile, the company has focused on initiatives such as launching Shriram Green Finance, aiming for an AUM of Rs 5,000 crore, focusing on areas like electric vehicle (EV) financing and solar energy projects.
Key Financial Indicators Table
The following table summarizes key consolidated financial indicators for Shriram Finance:| Metric | Unit | Dec-25 | Mar-25 | Mar-24 | Mar-23 |
|---|---|---|---|---|---|
| Assets under management (AUM) | Rs crore | 291709 | 263,190 | 2,38,624 | 1,93,730 |
| Total income (net of interest expenses) | Rs crore | 19475 | 23,405 | 20,195 | 17,577 |
| Profit after tax | Rs crore | 7003 | 9,436 | 7198 | 6,020 |
| Gross NPA (gross stage-3) | % | 4.5 | 4.6 | 5.2 | 6.0 |
| On-book gearing | Times | 4.1 | 4.1 | 3.9 | 3.8 |
| Return on managed assets | % | 3 | 3.4 | 3.1 | 3.0 |
Note: RoMA for Dec-25 is annualised.
The rating outlook has been assigned as Stable.
Stock Price Movement
Shriram Finance Ltd settled at ₹996.35 on Thursday, declining 2.66% as the market closed out the day. Throughout the session, shares fluctuated between a low of ₹990.65 and an intraday high of ₹1014.15.Source:
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