In one of the largest loan sales of the fiscal year, Sammaan Capital (formerly Indiabulls Housing Finance) has sold a stressed loan portfolio worth ₹5,000 crore to the Asset Reconstruction Company (India) Ltd (Arcil).
The deal is a strategic move by Sammaan Capital to clean up its legacy books as it pivots toward a new growth strategy backed by significant foreign investment.
Transaction Details
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Portfolio Composition: The pool includes real estate loans, high-value mortgage loans, and loans against property.
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The “Haircut”: Arcil valued the ₹5,000 crore portfolio at approximately ₹2,400 crore, representing a 52% discount.
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Payment Structure: The transaction follows a 15:85 structure:
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₹360 crore paid in upfront cash.
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The remaining balance is issued via Security Receipts (SRs), to be redeemed as recoveries are made.
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Strategic Rationale: A New Direction
The sale allows Sammaan Capital to offload “stressed but not yet NPA” (Non-Performing Asset) loans that were legacy holdings. This cleanup is essential for the company’s refreshed business model following a major investment from Abu Dhabi’s International Holding Co (IHC).
Key shifts for Sammaan Capital:
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Core Focus: Transitioning to high-growth areas including gold loans, personal loans, and MSME lending for low-to-middle-income segments.
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Capital Infusion: The company recently secured a massive capital injection from IHC (Avenir Investment RSC), which will eventually give the Abu Dhabi firm a 66.65% stake.
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Growth Targets: CEO Gagan Banga stated the firm aims to double its Assets Under Management (AUM) from ₹65,000 crore to ₹1.3 lakh crore within three years.
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Rating Upgrade: CRISIL recently upgraded Sammaan Capital to AA+/Stable, citing the strong managerial and financial backing from the IHC Group.
Market Impact
By clearing these delayed payment loans, Sammaan Capital aims to keep its annualized credit costs below 1%. For Arcil, the acquisition represents a significant bet on the recovery of the Indian real estate and mortgage sectors, where these assets are expected to yield returns as payment cycles normalize in the coming fiscal years.
