Shriram Finance shares hit record high, cross Rs 1,000 for first time. Too late to buy?

Shares of Shriram Finance Ltd gained as much as 1.3% to hit a record high of Rs 1,009 on the first day of 2026. With today’s gain, the share price is up for a third session in a row and has risen nearly 6% over the same period. In 2025, the stock price rose as much as 72%.

One of the major reasons for the strong performance was Japan based MUFG agreeing to acquire a 20% stake in Shriram Finance for $4.4 billion, marking the Japanese bank’s largest ever investment in India and surpassing its earlier cumulative investments of $1.7 billion.

What are analysts saying?

International brokerage Nomura has raised its target price on the stock to Rs 1,140, implying an upside of 14.4% from current levels. While MUFG Bank will be classified as a public shareholder, Nomura highlighted that it will have the right to nominate up to two non independent directors on the board. In the brokerage’s view, the presence of a leading Japanese bank could add value across multiple aspects of Shriram Finance’s operations and business model, making the development a clear positive.

Citi has also maintained its Buy rating on Shriram Finance while raising the target price to Rs 1,100 from Rs 870, backed by earnings upgrades of over 10%. The brokerage views the MUFG transaction as a strong endorsement of Indian lenders by a global foreign bank, significantly strengthening Shriram’s balance sheet. Post the deal, Tier 1 capital is expected to rise sharply to around 33% from 20%, with leverage reducing to nearly 3x. Citi estimates over 30% accretion to book value, which not only enhances long term growth capital but also improves earnings visibility. The stronger capital position could pave the way for a potential credit rating upgrade and better access to low cost global funding over time.

PL Capital reiterated its Buy call on Shriram Finance and raised its target price to Rs 1,060 per share. The brokerage said the transaction would significantly strengthen the company’s capital base and improve balance sheet resilience, providing long term growth capital to support expansion across lending segments.

Earlier this week, CARE Ratings upgraded the credit rating on Shriram Finance’s non convertible debentures and subordinate debt aggregating Rs 2,500 crore to “CARE AAA; Stable” from “CARE AA+; Stable.” The upgrade reflects recent developments, including the company’s operational and financial performance in FY25 and the first half of FY26. The rating agency has also reaffirmed the highest short term rating of “CARE A1+” on the company’s commercial paper programme amounting to Rs 7,500 crore.

Also Read | Mutual funds increase cash allocation by over Rs 14,500 crore in 2025; 5 new AMCs join in

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)