Sammaan Capital Plans NCD Buyback to Cut Borrowing Costs

Sammaan Capital Ltd (SCL) announced it will repurchase its privately placed Non-Convertible Debentures (NCDs) at face value. This initiative aims to lower the company's overall cost of borrowing and refine its debt management. The buyback offer is open until May 15, 2026, with existing NCD maturities extending up to March 31, 2027.

A successful buyback could significantly cut SCL's finance expenses, boosting profitability. The move also signals proactive debt management and a commitment to optimizing its capital structure. It could also improve SCL's access to larger, longer-term funding sources at more competitive rates.

Sammaan Capital, previously known as Indiabulls Housing Finance Limited, is transforming into an asset-light, retail-focused Non-Banking Financial Company (NBFC). A substantial capital injection from International Holding Company (IHC) of Abu Dhabi, which now owns a 41.2% stake, significantly boosted its financial flexibility. This led to its credit rating being upgraded to CRISIL AA+/Stable on April 10, 2026. The company has a track record of proactive debt management, having repaid over ₹1,64,000 crore of gross debt since September 2018. SCL has previously issued NCDs publicly, with issuances of up to ₹250 crores recorded in September 2024 and July 2025.

The buyback is expected to lower SCL's interest expenses. This aims to improve the alignment of its debt maturities and enhance overall financial flexibility. A more optimized debt profile could help SCL access a wider range of longer-term funding. Reduced borrowing costs could positively affect key financial metrics, such as net interest margins and profitability.

However, the success of the buyback depends on how many NCD holders choose to participate, which will determine the actual cost savings. Prevailing market interest rates could also affect how attractive the buyback offer is to investors.

Sammaan Capital operates in the housing finance and NBFC sector alongside peers such as LIC Housing Finance Ltd, Piramal Finance, and Aadhar Housing Finance. While these peers focus on retail lending, Sammaan Capital's proactive debt management and recent capital infusion position it uniquely for liability optimization.

The NCD buyback offer remains open until May 15, 2026, with existing NCD maturities extending up to March 31, 2027.

Going forward, investors will be watching the participation rate in the NCD buyback to gauge its effectiveness in cutting funding costs. The actual reduction in the company's average borrowing cost after the buyback will be a key indicator. SCL's ability to leverage its improved credit profile and debt structure for future fundraising will also be monitored. Finally, the impact of lower finance costs on net interest margins and overall profitability will be assessed.