Sammaan Capital Ltd. plans to cut its cost of funds and expand margins after Abu Dhabi-based International Holding Company's entry as promoter, with management targeting a reduction of more than 200 basis points over the next 12 to 18 months.
The company will begin by buying back high-cost debt and refinancing borrowings at lower rates, Managing Director and Chief Executive Officer Gagan Banga told NDTV Profit in a televised interaction. Incremental borrowings will come at costs that are 200 to 250 basis points lower than recent levels, he added.
"We would use the liquidity available with us... to see whether we don't need to wait for the next 12 to 18 months, and we can perhaps buy some of our higher cost debt almost instantly," Banga said. The strategy followed IHC's investment in Sammaan Capital, which gives the non-bank lender access to capital and funding channels that can support lower borrowing costs and balance sheet changes.
Growth Plan
The company expects the funding reset to support growth in the current financial year. Banga said disbursements could double to about Rs 35,000 crore, with most of the lending continuing in mortgage products and a smaller share coming from new segments.
"We should do 5,000 crores of disbursals in products which we are going to introduce through the course of the year," he said.
Sammaan Capital also plans to expand into new loan categories as it moves beyond its mortgage-focused model.
Liability Management
The company has started a liability management programme to lower borrowing costs. It plans to buy back some dollar-denominated bonds and domestic non-convertible debentures using available liquidity.
Banga said the aim is to reduce both the cost of new borrowings and the cost of existing debt. "Over the next 12 to 18 months, most certainly, the flow cost of funds would reduce," he said.
The company has already reduced debt in recent years. Banga said it repaid about Rs 1.3 lakh crore without delays.
Control And Capital
On ownership, Banga said IHC has control despite holding about 41% stake, adding that control in a listed company does not depend only on majority shareholding.
"At 41% they have more than adequate control," he said, adding that the focus remains on bringing more capital into the business rather than on the outcome of the open offer.
Reset Phase
Banga said the investment marks a break from earlier challenges faced by the company and allows it to move forward with a new structure.
"The new parentage does allow us to do a break from the past. It is the most significant break from the past that we could do," he said, adding that the company will continue to cooperate with any ongoing reviews while focusing on growth.
Sammaan Capital is now aiming to scale its lending and expand its network over the next few years, supported by lower funding costs and access to capital.
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