Sammaan Capital

Sammaan Capital announced a pivotal strategic partnership with IHC, which invested USD 1 billion, making it a promoter and strategic shareholder. This investment, IHC's first promoter-level in India, reflects strong confidence in Sammaan Capital and the Indian financial services sector. INR 5,652 crores ($592 million) has already been received through equity shares and upfront warrant payments, with an additional INR 3,200 crores ($335 million) expected within 18 months upon warrant conversion. IHC's current equity ownership is 28.5%, projected to reach 43.5% post-conversion.

Following IHC's investment, all three domestic rating agencies—CRISIL, CARE, and ICRA—upgraded Sammaan Capital within 50 days. This positive trajectory is expected to be replicated by international rating agencies. The upgrades have already led to a 100 basis points appreciation in domestic bonds and 250 basis points in international bonds. Management anticipates a 150 basis points reduction in the cost of funds over the next three years, with a potential 270 bps improvement as the company progresses from AA to AAA ratings.

The company highlighted its fortified balance sheet, starting with an opening AUM of INR 53,160 crores, characterized by 0 gross and 0 net NPA. No incremental net provisions are required for this opening AUM. The annualized credit cost for INR 3.6 lakh crores disbursed over the years stands at a healthy and competitive 1.9%. Sammaan Capital maintains a strong capital adequacy of 20.2%, which is projected to reach 29% pro forma with the warrant conversion, providing ample capital for growth.

Sammaan Capital has set ambitious financial targets, aiming for a Profit After Tax (PAT) of INR 1,400 crores and disbursements of INR 30,000 crores for FY26. The company targets a long-term Return on Assets (ROA) of 4.4% by FY29-30, with a steady-state ROA of 4-plus percent, and high-teen Return on Equity (ROE). The Net Interest Margin (NIM) is expected to start at 3.5% this year and eventually reach 8%, driven by lower cost of funds and contributions from the sold-down book.

Leveraging IHC's expertise, Sammaan Capital is focusing on digital and AI transformation to enhance customer experience, service responsiveness, and operational efficiency. The company aims to significantly reduce its cost-to-income ratio from the current 50% to 26% by FY30. This will be achieved through AI-driven automation, which is expected to increase agent productivity by 30% and reduce secured mortgage loan turnaround time from 5-7 days to 2-3 days.

While initial growth will be driven by existing mortgage products, Sammaan Capital plans to diversify into new offerings like gold loans and other secured/unsecured products. By FY30, mortgage-backed products are expected to constitute 50% of disbursals. The overall portfolio strategy emphasizes a mix of 60% secured and 20% unsecured/semi-secured lending, with 80% of disbursals being retail. Approximately 30% of incremental disbursements will be done through co-lending or direct assignment arrangements.

Sammaan Capital intends to resume dividend payments, with a policy of at least 25% of profits, targeting 40%. Management expressed strong optimism about India's growth story and the company's ability to capitalize on it, leveraging its institutional knowledge, experienced management team, and the strategic partnership with IHC. The company aims to expand its workforce to 20,000 people and its branch network to 1,600, while growing its borrower base tenfold by the end of FY26.