Sammaan Capital: A New Chapter of Growth and Digital Transformation

Sammaan Capital Limited, an Indian financial services company, is embarking on a transformative journey, marked by a significant strategic investment and a clear roadmap for future growth. The company's Q2 FY26 earnings call highlighted a period of stabilization and strategic repositioning, with key financial metrics reflecting a positive shift despite ongoing transitions.

For Q2 FY26, Sammaan Capital reported a total revenue from operations of ₹2,250.60 Crore, a slight decrease from ₹2,422.49 Crore in Q2 FY25. However, the company turned a significant corner in profitability, reporting a Profit After Tax (PAT) of ₹308.47 Crore, a stark contrast to the loss of ₹2,760.72 Crore in Q2 FY25. This turnaround underscores the effectiveness of its consolidation efforts and the initial benefits of its strategic initiatives. Net Interest Income (NII) stood at ₹975 Crore, compared to ₹1,187 Crore in Q2 FY25, reflecting the ongoing shift in asset mix towards retail.

Strategic Investment and Financial Rejuvenation

The most pivotal development for Sammaan Capital is the strategic investment by International Holding Company (IHC), an Abu Dhabi-based conglomerate and one of the Middle East's most valuable holding companies. IHC is infusing ₹8,850 Crore of primary capital to acquire a 41.2% stake, with a potential to increase its holding to 63.4% through an open offer. This substantial capital infusion is not just about financial strength; it also brings IHC's expertise in advanced digitization, process automation, and best-in-class IT infrastructure, promising significant synergies for Sammaan Capital.

This investment has already had an immediate positive impact on the company's borrowing profile. Sammaan Capital recently raised a $450 million 5-year bond at a 7.5% coupon rate, representing a 150-200 basis points tightening in price compared to previous transactions. Rating agencies like Moody's, ICRA, and CRISIL have placed the company on review for possible upgrades to AA, signaling increased market confidence. Management anticipates that a 200 bps reduction in the cost of funds could lead to a 50%+ increase in Profit After Tax, highlighting the profound financial leverage of this transformation.

Scaling Assets and Digital Innovation

On the asset side, Sammaan Capital is setting ambitious targets. The company aims to scale annual disbursals from ₹15,000 Crore to ₹35,000 Crore by FY27. This growth will be supported by widening product lines beyond traditional mortgages, evaluating new loan segments for low to mid-income customers, and leveraging its well-capitalized balance sheet. The company's 'eMortgage' initiative is at the forefront of its digital transformation, aiming for paperless loan fulfillment and anticipating that up to 60% of customers will come through this channel by the end of FY26. This end-to-end online loan fulfillment process, integrating digital KYC, banking, underwriting, and disbursal, is expected to significantly reduce cost-to-income and improve operational efficiency.

Sammaan Capital is also expanding its physical distribution network, with plans to increase its employee base from approximately 4,400 to over 17,000 and its branch network from 219 to 570 by FY2030. This dual approach of digital innovation and physical expansion is designed to maximize reach and customer engagement across India.

Robust Asset Quality and Regulatory Alignment

The company's asset quality remains robust, with Gross Stage 3 at 1.4% and Net Stage 3 at 0.8% in H1FY26, indicating effective risk management. Gearing has significantly improved, reducing from 8.2x in FY18 to 1.9x in Q2FY26, providing substantial headroom for future growth. Capital Adequacy stands strong at 34.8% in FY25.

Sammaan Capital is also proactively adapting to new co-lending regulations, which now include non-priority sectors and a reduced minimum retention ratio of 10%. This regulatory evolution is seen as a positive development, unlocking scalability and improving profitability through increased ticket sizes and operational cost amortization. The company is developing its own solutions and collaborating with fintech platforms to ensure a seamless transition to these new guidelines.

Outlook: A Future of Confident Growth

Sammaan Capital is poised for a new era of confident growth, driven by strategic capital, technological leverage, and a focused expansion strategy. The management team, which has demonstrated loyalty and resilience through past challenges, is now geared towards executing this growth roadmap. While near-term margin compression is expected due to the retailization of assets, the long-term benefits of reduced cost of funds and diversified, scalable operations are anticipated to drive significant value creation for all stakeholders. The company expects the transaction with IHC to conclude by March 31, 2026, setting the stage for accelerated growth in the coming fiscal years.