As of May 7, 2025, Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, is in advanced discussions to acquire a minority stake of up to 19% in HDB Financial Services, the non-banking financial subsidiary of HDFC Bank. The proposed investment is valued at approximately ₹12,000 crore (~$1.44 billion) .

This marks the second attempt by MUFG to invest in HDB Financial Services. An earlier proposal was declined by HDFC Bank due to differences over valuation. Currently, HDFC Bank holds a 94.54% stake in HDB Financial Services .

The potential deal comes amid regulatory changes by the Reserve Bank of India (RBI) affecting non-banking financial companies (NBFCs), including HDB. These changes have led to a decline in HDB’s valuation, now estimated between $8 billion and $8.5 billion, down from previous estimates of $10–12 billion .

In the March 2025 quarter, HDB reported a net profit of ₹530.9 crore, a decrease from ₹656 crore in the same quarter the previous year. Additionally, gross stage 3 assets increased to 2.26% from 1.90% year-on-year, and return on assets fell to 1.8% from 3% .

The proposed investment by MUFG is expected to bolster HDB’s capital base and could alleviate investor concerns regarding HDFC Bank’s need to reduce its stake in HDB Financial Services to comply with RBI regulations. The transaction is anticipated to close within a month, pending final negotiations .

Sources