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Journalism of Courage
A downward-trending small-cap housing finance stock that has mostly been in the news for legal issues has suddenly caught the attention of investors. In the last six months, the stock surged 65 per cent, with a 23 per cent rally in the last three trading days of September. Its trading volume skyrocketed as institutional buying took place in this stock. The news of equity capital injection, that too by a foreign institutional investor, made Sammaan Capital a trending stock in the last two months.
You may know Sammaan Capital as Indiabulls Housing Finance (IBHFL), which was its name before July 2024. The company fell into firefighting mode after an over Rs 1 lakh crore loan default by Infrastructure Leasing & Financial Services (IL&FS) in 2018 hit the finance sector, especially housing finance companies (HFCs), right where it hurts the most—investor trust. Some HFCs with strong capital backing thrived. But two HFCs–IBHFL and Punjab National Bank Housing Finance (PNB HFL)–began a rundown of loans given to real estate developers.
Despite a strong credit rating and high-quality loan book, both IBHFL and PNB HFL were struggling with the negative image of their promoter/parent company. Indiabulls group promoter Sameer Gehlaut was accused of embezzlement, and PNB suffered from the Nirav Modi scam. While their stocks navigated the allegations of embezzlement, they lost value when the 2018 IL&FS crisis created panic among investors.
In a cyclical market, multibaggers of the past can be the riskiest investments of today. While many companies make efforts to turn around, very few succeed. A successful turnaround is a long process where a new management restructures the business, brings in long-term equity capital, sustains growth, and builds investors’ trust.
Both PNB HFL and Sammaan Capital have been sowing the seeds of a turnaround. Their share price moved in tandem until 2022, but the gap widened, and PNB HFL stock started recovering in 2023. Riding the rally was the appointment of Girish Kousgi as CEO and his reputation for turning around Can Fin Homes. He helped PNB HFL come out of the 2018 crisis by focusing on fast-growing affordable housing finance and riding the recovery rally of 320 per cent between May 13, 2022 and June 27, 2025.
Taking a leaf from PNB HFL’s book, Sammaan Capital has appointed Himanshu Mody as deputy CEO, effective September 4, 2025. He led the financial turnaround of Suzlon Energy by raising substantial equity and debt from multiple sources, restoring liquidity, and reviving credit ratings. Sammaan Capital recently rallied 65 per cent between April 7 and October 1 after 15 months of downturn as institutional investors bought its shares. What attracted institutional investors’ attention? Can it replicate the success of PNB HFL?
To answer these questions, we have to understand the root cause of Sammaan Capital’s troubles.
The Indiabulls group started its operations in 1999 as a financial services company and got listed on the Bombay Stock Exchange in 2013. But trouble started to brew in 2012 when Canada’s Veritas Investment Research, several newspapers, and a Public Interest Litigation (PIL) in 2019 accused Indiabulls of routing a substantial part of the loaned money as investments in shell companies owned and controlled by its promoter.
As part of the turnaround, IBHFL stopped giving loans to real estate developers and shifted focus to retail housing finance. However, the company had legacy loans given to developers, which remained unpaid as house sales slowed.
Then came the IL&FS crisis, which made wholesale borrowing expensive. Capital is the raw material for an HFC, and the cost of that raw material skyrocketed after 2018. The pandemic delayed real estate recovery, pushing many developer loans to stage 3. IBHFL stock lost 92 per cent of its value between August 3, 2018, and July 1, 2022. Its gross non-performing assets (GNPA) increased to 3.2 per cent in FY22.
It faced challenges on three fronts: rising cost of capital due to liquidity crunch from the IL&FS crisis, the rising GNPA of developer loans due to slowing home sales, and negative publicity of the promoter.
Things started to improve in FY23 as the demand for homes increased. Developers completed their projects, sold properties, and started repaying loans, enabling IBHFL to reduce its GNPA to 2.9 per cent in FY23 and 1.5 per cent in Q1FY26. It almost halved its loan book from Rs 1.2 lakh crore in FY18 to Rs 62,346 crore in FY25, reducing the share of legacy loans to 37.7 per cent of the loan book as part of a clean-up of bad loans. It aims to reduce the contribution of these legacy loans to single digits by the end of FY27.
In the meantime, promoter Sameer Gehlaut faced several probes from various government entities. The IL&FS crisis had dried up liquidity in the market, and the negative publicity of the promoter resulted in a loss of investors’ trust, making it difficult to raise cheap capital. The company’s stock was trading at a discount to its peers. Gehlaut stepped down as promoter in March 2022 and exited IBHFL by selling his stake in the company by July 2023.
To establish its transition from a promoter-led company to a “fully professionally managed and run company”, IBHFL rebranded to Sammaan Capital.
In 2024, Sammaan Capital focused on consolidating its legacy loans and cleaning up its books. It acquired Rs 7,200 crore legacy loan book from its subsidiary Sammaan Finserv (SFL), previously Indiabulls Commercial Credit, in Q2 FY25. It reported a Rs 5,000 crore provision on the SFL loans that pushed Sammaan Capital into a net loss of Rs 1,807 crore. This is a one-time provision and gives the company ample room to clean its books.
The company now has a new structure, wherein Sammaan Finserv will focus on semi-urban areas, and Sammaan Capital on the top 100 cities. Moreover, the company has shifted to an asset-light model based on co-lending. Here, it originates and processes retail home loans as per credit parameters jointly formulated with banking partners. It retains 20 per cent of the loan and transfers 80 per cent to the banking partner. This segment has generated a growth loan book of Rs 38,897 crore in Q1FY26.
Until now, Sammaan Capital has focused on consolidating and cleaning bad loans, repaying high-interest debt, and stabilising its balance sheet. In FY26, the company is focused on raising capital and using the proceeds to disburse loans. It has issued several debt securities. That’s where Himanshu Mody’s appointment as deputy CEO will prove instrumental.
In August 2025, the Reserve Bank of India (RBI) revised the co-lending arrangement, reducing the retention ratio to 10 per cent, which Sammaan Capital will implement in FY27. It will implement the co-lending model using e-mortgage that completes the entire loan origination process from lead onboarding to loan disbursal online. This will help reduce costs and process loans faster.
Sammaan Capital aims to increase its consolidated assets under management (AUM) from Rs 62,346 crore in FY25 to Rs 75,000 crore in FY26 and Rs 90,000 crore in FY27.
What Sammaan Capital needs is capital and re-rating. Abu Dhabi-based International Holding Company (IHC), through its subsidiary Avenir Investment RSC, has agreed to acquire a 41.2 per cent stake in the company for Rs 8,850 crore. It can acquire another 26 per cent through an open market offer for Rs 139 per share. This transaction will be completed in three tranches of Rs 4,587 crore worth of shares, and warrants of Rs 1,207 crore and Rs 3,055 crore.
Sammaan Capital will use the first tranche for its core products—home loans and loans against property—and the remaining tranches for other commercially viable products, like gold loans and personal loans for lower and middle-income customers.
The above transaction is subject to the RBI’s approval. Note that Sammaan Capital had tried to merge with Lakshmi Vilas Bank in October 2019, but the RBI rejected the deal as it offered Sammaan a backdoor entry to become a bank.
A long-term equity capital injection could help the company improve its credit rating and boost growth. Hence, its stock price could remain sensitive to the development around the deal.
If Avenir completes all tranches of investment, it could become the promoter, change the articles of association, and nominate board members. An institutionally run company could bring better corporate governance.
The next two years could be challenging for Sammaan Capital as it will see the execution of the Avenir deal and growth in affordable housing loans. The company aims to regain its lost market share as the third-largest HFC by 2030, a position currently held by PNB HFL.
Sammaan Capital now has a clean loan book, a co-lending model to access low-cost capital, has overcome the promoter’s negative publicity, and is no longer giving new loans to real estate developers where money was being siphoned to the promoter’s personal wealth. And now, a fresh equity capital injection sets the stage for loan book growth.
All these signs show that the company is ready for growth. But is it ready to compete with names like Bajaj Housing Finance, Tata Capital, and LIC Housing Finance that enjoy investors’ trust? The next two years will determine that.
Retail investors considering investing in Sammaan Capital should know that it is a high-risk stock that has yet to show revenue and earnings growth. It is at an early stage of a turnaround. The true test for the stock is to sustain growth.
While there are relatively low-risk HFC stocks with strong fundamentals and a growing portfolio, Sammaan Capital catches the attention of those seeking a potential turnaround stock while being aware of the downside risk.
Note: We have relied on data from http://www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
Puja Tayal is a financial writer with over 17 years of experience in the field of fundamental research.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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