Shares of Shriram Finance surged over 2% on Tuesday as reports indicate Japan’s MUFG is nearing a $3.2 billion investment for a 20% stake in the Indian financial services company. According to a Bloomberg report, discussions between the two companies are at an advanced stage, suggesting a potential agreement could be finalized within the week.

The prospective investment by MUFG, a major global banking group, would significantly bolster Shriram Finance's capital base and potentially fuel its expansion plans. Shriram Finance specializes in providing financial services to rural and semi-urban areas in India, focusing on vehicle finance, loans to small and medium enterprises (SMEs), and gold loans.

While details of the final agreement remain undisclosed, the reported valuation of Shriram Finance is considerable. The investment would represent a substantial vote of confidence in the company's business model and its growth prospects within the Indian financial sector. Investors are closely watching the developments, as the deal, if finalized, could set a precedent for further foreign investment in Indian financial institutions.

Bloomberg's reporting suggests the deal is nearing completion, but the final terms and conditions are still being negotiated. Confirmation from both Shriram Finance and MUFG is anticipated in the coming days.