MUFG to Acquire 20% Stake in Shriram Finance with Controversial Non-Compete Fee

Japan's Mitsubishi UFJ Financial Group (MUFG) plans to acquire a 20% stake in Shriram Finance for $4.4 billion, marking India's largest inbound financial sector deal. The agreement includes a $200 million non-compete fee paid to Shriram's promoter entity, Shriram Ownership Trust, which will retain control and significant shareholding. This unusual arrangement has raised questions about regulatory compliance and equitable treatment of shareholders. Credit rating agencies have upgraded Shriram Finance's ratings, citing improved capitalization and strategic benefits from MUFG's investment.