The non-banking financial company (NBFC) on Tuesday said that IHC, through its affiliate Avenir Investment RSC, will become its promoter by acquiring a 41.5% stake via preferential allotment of equity shares and warrants. An additional Rs 3,198 crore will later be paid by IHC within a period of 18 months upon conversion of the warrants into fully paid equity shares.
This comes after the Reserve Bank of India (RBI) and market regulator Sebi approved the proposed acquisition of a controlling stake of 66.65% by Avenir Investment RSC, owned and controlled by Abu Dhabi-based International Holding Company (IHC).
Avenir Investment RSC had proposed to invest nearly Rs 8,850 crore by way of a preferential issue. This is one of the largest investments by a Middle Eastern entity in India’s financial services sector.
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Sammaan Capital to transition into a diversified NBFC
In its latest exchange filing, Sammaan Capital said that Avenir will work on concluding the open offer at Rs 139 per share within 30 days. It called IHC’s investment a “significant milestone”, which elevates it into a select group of large upper-layer NBFCs backed by a multinational conglomerate. “As a strategic promoter, IHC brings substantial capital, global funding networks and institutional relationships that will meaningfully enhance Sammaan Capital’s financial flexibility and support its growth ambitions,” it said.
“Sammaan Capital shall transition from a pure-play mortgage financier to a diversified NBFC by targeting mid- to low-income borrowers through its expanding pan-India branch network, offering products going beyond mortgage loans to retail products including secured/unsecured MSME, personal loans, business loans, gold loans, etc,” it said, adding that it has set strong business growth targets for itself.
Fresh capital will allow firm to double its asset base: CEO
In an interview with The Economic Times, Sammaan Capital CEO Gagan Banga said that the infusion of fresh capital allows the company to double its asset base in the next three years after almost an eight-year consolidation phase.
“Having come through a crisis that was running from 2018 to 2023 to stabilising the company by raising equity capital of Rs 5,000 crore in 2024, we needed strong parentage. And I cannot think of a stronger parent which is larger than the largest company in India. This is a very healthy cocktail of good capital with good risk managers and we can create tremendous value for stakeholders. The IHC management is deeply aware of India and they appreciated the fact that this is a liabilities business and that this management team has managed the liability rundown and therefore it’s a good base where real value could get created, especially because of how cheap we were relative to our peers,” he said.
“Our assets under management (AUM) is about Rs 65,000 crore and in three years it will be close to Rs 1.3 lakh crore. Our capital adequacy is comfortably above 20%. This takes us beyond 30%. Any capital adequacy higher than 18% to 19% is essentially capacity to grow, so we now have the capacity to grow without any further dilution at least for the next five years,” he added.
Sammaan Capital is currently a mortgage-focused non-banking finance company (NBFC) and services 1.6 million customers through 220 branches. The shares of the company have fallen more than 2% in the past five days, but gained around 2% in the past month.
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