Japanese Investment in India: On one hand, India has made its strong mark among the fastest growing economies of the world and on the other hand it has also continuously won the trust of global investors, the result of which is that many multinational companies shifting business from China are making India their new destination; In this series, Japan’s largest banking group Mitsubishi UFJ Financial Group (MUFG), playing a big bet in the field of Indian banking and financial services, has planned to invest about Rs 40,000 crore in Shriram Finance.
This will give MUFG a stake of approximately 20 percent in India’s second-largest non-banking financial company (NBFC), and the deal not only reflects the growing confidence of foreign investors in the Indian financial market but also underlines Japan’s long-term investment outlook.
Japanese investment is increasing
According to the Economic Times report, MUFG is looking for sustainable returns in the fast-growing Indian market by exiting the domestic Japanese market, and this investment is part of the same strategy, as there has been a lot of activity by Japanese financial institutions in India in recent times—be it Mizuho’s acquisition of Avendus or Daiwa Securities Group’s investment in Ambit.
At the same time, Mitsui Banking Corporation investing 1.6 billion dollars and taking 20 percent stake in Yes Bank in May is also an indication of the same trend. This is MUFG’s second major foray into India’s NBFC sector, having earlier tried to invest $2 billion in HDB Financial Services. Whereas increasing its stake to 20 percent by investing $338.5 million in DMI Financial Pvt. shows that the group is following the strategy of working closely with local partners in India.
Big deal in India’s NBFC sector
This proposed deal of about $ 4.45 billion for 20 percent stake in Shriram Finance is considered to be one of the biggest deals in the history of India’s NBFC sector, which will not only strengthen the Indian financial sector on the global stage but can also open new avenues for big acquisitions and strategic partnerships in the future.
