Sammaan Capital Limited, a leading player in India’s financial services sector, is launching its Tranche II Non-Convertible Debentures (NCD) issue in December 2024. With a base issue size of ₹ 100 crores and a green shoe option of ₹ 200 crores, this secured NCD offering is aimed at providing stable returns to investors. This article reviews the Sammaan Capital NCD – Dec-2024 issue in detail, covering company background, interest rates, credit ratings, financials, reasons to invest, risks, and the process of subscribing.
About Sammaan Capital Limited
Originally incorporated as Indiabulls Housing Finance Limited, Sammaan Capital underwent a transformation in 2024 to become a Non-Banking Financial Company (NBFC). With its expertise in credit and investment services, the company focuses on providing secured lending solutions. Headquartered in New Delhi, Sammaan Capital boasts robust financial services infrastructure and a professional management team. It is part of Indiabulls Group.
Sammaan Capital NCD – Dec-2024 – Issue Details
Here are the issue details.
| Issue Open | December 9, 2024 – December 20, 2024 |
| Security Name | Sammaan Capital Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 100.00 Crores |
| Issue Size (Oversubscription) | Rs 200.00 Crores |
| Tranche Issue Size | Rs 300.00 Crores |
| Issue Size (Shelf) | Rs 2,000.00 Crores |
| Tranche Number | II |
| Issue Price | Rs 1000 per NCD |
| Face Value | Rs 1000 each NCD |
| Minimum Lot size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE, NSE |
| Credit Rating | CRISIL AA/Stable by CRISIL Ratings Limited and [ICRA] AA (Stable) by ICRA Limited. |
| Tenor | 24, 36 ,60, 84 and 120 months |
| Series | Series I to XII |
| Payment Frequency | Monthly, Annual and Cumulative |
| Basis of Allotment | First Come First Serve Basis |
| Debenture Trustee/s | Idbi Trusteeship Services Ltd. |
Sammaan Capital NCD – Dec-2024 – Interest Rates and Tenure
The NCDs are offered across multiple series with varying tenures and interest rates, allowing investors to select based on their financial goals. Key highlights include:
- Coupon Rates: Competitive rates across series, with interest payouts on monthly, annual, or cumulative bases.
- Tenure Options: Options range from 24 months to 120 months.
Here are the interest rate and coupon details.
| Options | I | II | III | IV | V | VI | VII | VIII | IX | X | XI | XII |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | Monthly | Cumulative | Annual | Monthly | Cumulative | Annual | Monthly | Annual | Monthly | Annual | Monthly |
| Tenure (Months) | 24 | 24 | 24 | 36 | 36 | 36 | 60 | 60 | 84 | 84 | 120 | 120 |
| Coupon (% per Annum) | 9.65% | 9.25% | NA | 9.90% | 9.48% | NA | 10.15% | 9.71% | 10.50% | 10.03% | 10.75% | 10.25% |
| Effective Yield (% per Annum) | 9.65% | 9.65% | 9.65% | 9.90% | 9.90% | 9.90% | 10.15% | 10.15% | 10.50% | 10.48% | 10.74% | 10.75% |
| Amount on Maturity (In Rs.) | 1,000.00 | 1,000.00 | 1,202.32 | 1,000.00 | 1,000.00 | 1,327.38 | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 |
Sammaan Capital NCD – Dec-2024 – Credit Ratings
The NCD issue is rated “CRISIL AA/Stable” by CRISIL Ratings and “[ICRA] AA (Stable)” by ICRA Limited. These ratings reflect a high degree of safety regarding timely servicing of financial obligations and low credit risk. For more information, refer the details on BSE website at Sammaan Capital NCD – Dec-2024 Prospectus
Financial Overview
Sammaan Capital has demonstrated consistent financial performance:
- Assets Under Management (AUM): Substantial growth over recent years.
- Profitability: Positive PAT figures indicate strong operational efficiency.
- Net Worth: Robust capital base ensuring adequate risk coverage.
(Amount in INR Crores)
| Period Ended | 31-Mar-22 | 31-Mar-23 | 31-Mar-24 |
|---|---|---|---|
| Assets | 81,973.3 | 74,945.2 | 73,066.4 |
| Revenue | 8,993.9 | 8,725.8 | 8,624.8 |
| Profit After Tax | 1,177.7 | 1,127.7 | 1,217.0 |
Why to invest in Sammaan Capital NCD – Dec-2024?
- High Credit Ratings : The CRISIL AA/Stable and [ICRA] AA (Stable) ratings reflect a strong assurance of timely interest and principal payments. These high ratings provide confidence about the creditworthiness of Sammaan Capital, making the NCDs a safer investment choice for conservative investors.
- Secured NCDs with Strong Asset Backing : The NCDs are secured by a first pari-passu charge on Sammaan Capital’s financial and non-financial assets. A minimum security cover of 1.25 times ensures robust protection for investors.
- Diverse Tenure and Interest Payment Options : With tenures ranging from 24 months to 120 months, the NCDs cater to both short-term and long-term investment goals. Additionally, investors can choose between monthly, annual, or cumulative interest payouts, offering flexibility based on liquidity needs.
- Attractive Yields Compared to Fixed Deposits : The offered coupon rates are typically higher than bank fixed deposit rates, making these NCDs an attractive option for those seeking better returns in a fixed-income instrument.
- Tax-Efficiency for Certain Investors : Investors like corporates or institutions may find tax advantages in investing in NCDs compared to other instruments, depending on their tax brackets and applicable laws.
- Growing Financial Profile of Sammaan Capital : The company has consistently shown growth in its financial metrics, including profitability and a well-capitalized balance sheet. This enhances the safety of the NCDs as a low-risk investment.
Risk Factors in these NCD’s
- Interest Rate Risk : While the NCDs offer fixed returns, rising market interest rates can make the returns on these debentures less attractive over time. Investors could miss out on higher-yielding opportunities in a rising rate environment.
- Credit Risk : Despite the high credit ratings, there is always a possibility of a credit event affecting the company. Any downgrade in credit ratings due to unforeseen financial or operational difficulties could impact the secondary market value of the NCDs.
- Liquidity Risk : Selling NCDs in the secondary market before maturity can be challenging if the demand for these instruments is low. This risk is particularly relevant for longer-tenure NCDs, where investors might need to hold until maturity to avoid capital loss.
- Company-Specific Risks
- Dependence on Market Conditions: As an NBFC, Sammaan Capital’s business is sensitive to changes in economic conditions, interest rates, and regulatory policies.
- Concentration Risk: A significant portion of its loan book may be concentrated in specific sectors, increasing vulnerability to sectoral downturns.
- Regulatory and Legal Risks : Changes in the regulatory framework governing NBFCs can impact the company’s ability to generate revenue or meet its financial obligations. Any ongoing litigation or compliance issues might also pose financial risks.
- Inflation Risk : The fixed returns from NCDs might lose purchasing power if inflation rates rise significantly during the investment tenure.
- Default and Non-Payment Risk : Although unlikely due to the company’s credit rating, any disruption in Sammaan Capital’s cash flow could lead to delayed or missed payments to NCD holders.
How to Buy Sammaan Capital NCDs?
Investors can apply for these NCDs through:
- ASBA Process: Via Self-Certified Syndicate Banks (SCSBs).
- Brokers: Submit application forms through registered stock exchange brokers.
- Online Platforms: Digital channels offering direct NCD subscription options.
Sammaan Capital NCD – Dec-2024 – Invest or Avoid?
The Sammaan Capital NCD issue presents an opportunity for investors looking for stable and fixed returns with low-risk exposure.
However, potential risks like market volatility and liquidity constraints are some of the critical risk factors.
Such NCD’s are best suited for investors who can take risk and who are looking for fixed-income investments in their portfolio.
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