IHC's Avenir Investment To Acquire 43% Stake In Sammaan Capital For Rs 8,850 Crore
The investment will see IHC emerge as the new promoter of Sammaan Capital. Jefferies is the sole advisor to Sammaan Capital.
Avenir Investment RSC, an affiliate of Abu Dhabi-based International Holding Company, has agreed to purchase a 43.46% stake in Sammaan Capital for nearly $1 billion (Rs 8,850 crore), the non-banking financial company said in a regulatory filing to the stock exchanges on Thursday, Oct. 2.
The NBFC, formerly known as Indiabulls Housing Finance, will be raising the capital by issuing preferential shares to Avenir after getting requisite approval. The investment will see IHC emerge as the new promoter of Sammaan Capital. Jefferies was the sole advisor to Sammaan Capital.
IHC will foray into India's financial services sector through the largest ever primary capital infusion by an investor in an NBFC. The deal is expected to fuel the next leg of growth for Sammaan Capital on the back of long-term patient capital, deeper access to low-cost liabilities and an improved credit rating.
Avenir-Sammaan Capital Deal
Post-preferential allotment, in which it will invest Rs 8,850 crore, Avenir will hold over 63 crore shares in the company, representing 43.46% of the holding. As per the agreement, 33 crore shares of the company will be issued to the investor at Rs 139 apiece, an18% discount to the CMP, in order to raise Rs 4,587 crore, while the rest will be through two tranches of warrants.
It will subscribe to 8.60 lakh warrants at the same price, with each carrying a right to subscribe to one equity share, which will help raise another Rs 1,207 crore, while another Rs 3,055 crore will be raised through the issue of 21.97 crore of similar warrants. This will trigger an open offer as per the regulatory guidelines to acquire an additional 26%.
Hence, Avenir to make open offer for public shareholders. Avenir will also 'acquire and exercise' control of the company and eventually be classified as a promoter of the company. Once it gets classified as a promoter, the agreement also provides for a change in the articles of association of the company and grants Avenir the right to nominate board members.
“India represents a core strategic market for us, and its long-term growth fundamentals are compelling. We have been impressed by Sammaan Capital’s leadership in enabling home ownership and empowering small businesses across the country,” Syed Basar Shueb, CEO of IHC, said in the statement.
“This $1 billion investment reaffirms our commitment to supporting Sammaan Capital 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," added Shueb. On Wednesday, shares of Sammaan Capital settled 5.41% higher at Rs 169.55 apiece on the BSE.
