MUMBAI: Global investment giant International Holding Co (IHC) has agreed to acquire a 41.2% controlling stake in Sammaan Capital, which was earlier Indiabulls Housing Finance, for Rs 8,850 crore. The Abu Dhabi investment conglomerate will complete the investment through its affiliate Avenir Investment.
The deal, the largest primary capital infusion into a domestic non-banking firm, will makes IHC Sammaan’s promoter with the right to appoint a majority of directors, Sammaan said in a statement.
International Holding Co is the most valuable holding company in the whole of West Asia and the Sammaan investment is its latest bet on the country’s housing finance space. IHC has become a major holding company in the Middle East and one of the world's largest investment firms with a market capitalization of $239.9 billion. IHC has been ramping up its India presence with high-profile investments, including deals with the Adani group and snack maker Haldiram’s.
As part of the transaction, Avenir will subscribe to 330 million shares and 306.7 million convertible warrants at Rs 139 each from Sammaaan. This will also trigger an open offer, as per the regulatory guidelines, to acquire an additional 26%.
Following the deal, Avenir will be classified as a promoter and will take control of the company.
“The $1 billion investment reflects our conviction in India’s financial sector and its commitment to widening access to capital,” the Abu Dhabi-headquartered group said. With this deal, IHC has forayed into the financial services sector in India through a major primary capital infusion into a non-bank financial company.
"We have been impressed by Sammaan’s leadership in enabling home ownership and empowering small businesses across the country. This $1-billion investment reaffirms our commitment to supporting Sammaan in its next phase of development, including the adoption of AI to enhance lending and credit solutions, and to contributing meaningfully to India’s financial ecosystem," Syed Basar Shueb, CEO of IHC said.
Commenting on the deal, Gagan Banga, managing director of Sammaan said, "Becoming part of the IHC family will help us further strengthen our affordable housing and mid-market mortgage offerings. By leveraging IHC’s global expertise and technology strengths, we are confident of accelerating our next phase of growth with renewed purpose."
Sammaan has 220 branches across 150 towns and cities, supported by over 4,400 employees.
The deal is subject to approvals from the Reserve Bank, the Competition Commission, and other customary closing conditions.
The domestic housing finance segment is worth Rs 33 trillion or $372 billion and is projected to more than double by FY30 on rising urbanisation, improved affordability, and government housing schemes, according to a Care Ratings report.
Earlier in September, Himanshu Mody, known as one of the key persons behind the turnaround of Suzlon, was appointed as the deputy CEO of Sammaan. Mody’s appointment is expected to boost Sammaan's ability to raise capital.
The Sammaan counter reacted negatively to the announcement with shares falling 3%. On a year to date basis, the shares are up nearly 10% and higher by 5% over the last year. In the past month alone, the shares rose more than 20%.