Abu Dhabi's IHC to Invest $1 Billion in India's Sammaan Capital for 43.46% Stake

International Holding Company (IHC), based in Abu Dhabi, has announced plans to invest USD 1 billion (approximately Rs 8,850 crore) to acquire a 43.46% stake in Sammaan Capital. This significant transaction is being executed through IHC's affiliate, Avenir Investment RSC Ltd. The acquisition is subject to approval from the Competition Commission of India (CCI), the country's fair trade regulator.

Sammaan Capital is an RBI-registered entity operating as a non-deposit-taking non-banking financial company (NBFC) and is classified as an investment and credit company in the 'upper layer'. It was formerly known as Indiabulls Housing Finance.

Shareholders of Sammaan Capital have already approved the proposed sale. The capital will be raised by issuing preferential shares to Avenir Investment RSC Ltd. This deal is noteworthy as it constitutes the largest primary capital infusion by an investor into an NBFC in India, signifying IHC's strategic entry into the Indian financial services market. IHC's CEO, Syed Basar Shueb, expressed commitment to supporting Sammaan Capital's growth, including advancements in AI for lending solutions. Gagan Banga, CEO and MD of Sammaan Capital, welcomed the partnership for future growth.

Impact This investment is expected to significantly strengthen Sammaan Capital's financial position, enabling it to expand its lending capabilities and integrate advanced technologies like AI. For IHC, it represents a key strategic move into the Indian market. The influx of substantial foreign capital into India's NBFC sector can boost credit availability and contribute to economic growth.

Impact Rating: 8/10

Difficult Terms Non-banking financial company (NBFC): A financial institution that offers banking services like loans and credit but does not possess a banking license.

Upper Layer: A classification by the Reserve Bank of India for NBFCs deemed significant based on their size and systemic importance, which mandates stricter regulatory compliance.

Preferential Shares: A class of stock that offers certain advantages over common stock, such as a fixed dividend payout or priority claim on assets during liquidation.

Competition Commission of India (CCI): The statutory body responsible for enforcing competition law in India, preventing anti-competitive business practices.

Primary Capital Infusion: The process of injecting fresh capital into a company by issuing new shares, thereby increasing its equity base.