Shriram Finance's Ratings Upgraded to AAA; Stable, Assigned for NCDs
ICRA Ratings has upgraded the Long-Term Rating for Shriram Finance Limited and assigned a rating of [ICRA]AAA; Stable for Non-Convertible Debentures (NCDs) proposed for issuance. The rating action removed the ratings from Watch with Positive Implications.The rating upgrades for the instruments are detailed as follows:
| Instrument | Prior Rating | Upgraded Rating |
|---|---|---|
| Fixed Deposit Programme | [ICRA]AA+; placed on Watch with Positive Implications | [ICRA]AAA; Stable |
| Non-Convertible Debenture Programme | [ICRA]AA+; placed on Watch with Positive Implications | [ICRA]AAA; Stable |
Furthermore, ICRA Ratings assigned a [ICRA]AAA; Stable Rating for an amount of Rs. 2000 crore for the NCDs planned for issuance by the company.
The rating summary highlights the following changes and assignments:
| Instrument* | Previous rated amount (Rs. crore) | Current rated amount (Rs. crore) | Rating action |
|---|---|---|---|
| Fixed deposit programme | - | - | [ICRA]AAA (Stable); Rating upgraded from [ICRA]AA+, removed from Watch with Positive Implications and Stable outlook assigned |
| Non-convertible debenture programme | 975.0 | 975.0 | [ICRA]AAA (Stable); Rating upgraded from [ICRA]AA+, removed from Watch with Positive Implications and Stable outlook assigned |
| Non-convertible debenture programme | - | 2,000.0 | [ICRA]AAA (Stable); assigned |
| Total | 975.0 | 2,975.0 |
ICRA's rating rationale, dated April 9, 2026, noted that Shriram Finance Limited's board of directors had approved the allotment of 47,11,21,055 fully paid-up equity shares through a preferential issue on a private placement basis from MUFG Bank Ltd (MUFG) for a consideration of ~Rs. 39,618 crore of primary equity capital. This investment results in MUFG holding a 20% stake in the company.
This transaction significantly bolstered the capitalisation profile of Shriram Finance Limited, providing a buffer against volatility in asset quality. The investment from MUFG is also anticipated to improve the company's cost of funding.
The rating factors in the company's leadership position in the preowned commercial vehicle (CV) financing segment. As of December 2025, Shriram Finance Limited was India's second largest non-banking financial company (NBFC) by assets under management (AUM), with 74% of its AUM focused on vehicle financing.
Key financial indicators provide a view of the company's performance:
| Shriram Finance Limited (consolidated) | FY2024 | FY2025 | 9M FY2026* |
|---|---|---|---|
| Total income | 34,998 | 41,859 | 35,660 |
| Profit after tax | 7,399 | 9,576 | 7,003 |
| Total managed assets | 2,66,453 | 3,10,330 | NA |
| Return on managed assets | 3.0% | 3.3% | ~2.9% |
| Managed gearing (times) | 4.2 | 4.3 | ~4.2 |
| Gross stage 3 assets | 5.2% | 4.6% | 4.5% |
| Capital-to-risk weighted assets ratio | 20.3% | 20.7% | 20.3% |
For the standalone financials, Total managed assets as of 9M FY2026* were reported at 3,36,377. The standalone Return on managed assets for 9M FY2026* was 2.9%.
The company's standalone on-balance sheet borrowings as of December 31, 2025, exceeded Rs. 2,51,000 crore, showing a diversified mix including public deposits (27%), term loans (20%), external commercial borrowings (ECBs; 19%), non-convertible debentures (NCDs; 17%), and securitisation (17%).
ICRA noted that the Stable outlook reflects the expectation that the company will maintain strong capitalization and a healthy earnings profile while continuing its operations scale up.
SHRIRAMFIN Stock Price Movement
Shriram Finance Limited shares today slipped by 2.70% to settle at ₹996.3. The equity closed on a notable volume of 7.67 million shares traded throughout the day.Source:
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