Global credit rating agency Moody's Ratings has affirmed the Ba1 long-term corporate family rating (CFR) of Shriram Finance Limited (SFL) and concurrently revised its outlook to positive from stable. This significant rating action comes in the wake of MUFG Bank, Japan's largest bank, announcing a planned strategic investment in the Indian non-banking financial company (NBFC). The outlook revision reflects Moody's expectation that Shriram Finance's business and financial profile will strengthen considerably over the coming quarters, primarily driven by this capital infusion. MUFG Bank is set to acquire a 20% stake in Shriram Finance through a preferential allotment of shares, valuing the investment at approximately ₹39,618 crore (around $4.4 billion). This transaction is poised to be one of the largest foreign investments ever recorded in India's non-banking financial sector, underscoring global investor confidence in India's expanding retail credit market. The capital injection is anticipated to materially improve SFL's capitalisation, enhance its access to both onshore and offshore funding channels, and reduce its cost of funds by an estimated 100 basis points over the next two years. Moody's projects that Shriram Finance's tangible common equity to tangible managed assets ratio will rise significantly and remain above 20% for the next four to five years, positioning it among India's highest-capitalised NBFCs. The deal is subject to regulatory approvals and shareholder consent, with completion expected in 2026.