Crisil Ratings has upgraded Sammaan Capital’s long-term rating to ‘Crisil AA+/Stable’ from ‘Crisil AA’ and removed it from ‘Rating Watch with Developing Implications’, following the completion of International Holding Company’s (IHC) acquisition of a controlling stake in the lender. The short-term rating on commercial paper and short-term NCDs has been reaffirmed at ‘Crisil A1+’.

“Crisil Ratings believes Sammaan Capital will benefit from association with the promoter, IHC, and will maintain strong capitalisation and comfortable asset quality in the retail segment,” the rating agency said.

IHC, through its affiliate Avenir Investment RSC Ltd, will invest Rs 8,850 crore to acquire up to 41.2% stake on a fully diluted basis, with the potential to increase its holding to 63.4% following a mandatory open offer. IHC has been designated as the promoter and will have the right to appoint the majority of the board. “IHC is expected to provide need-based support to Sammaan Capital and any change in support stance from IHC to Sammaan Capital remains a key rating sensitivity factor,” Crisil said.

The lender will operate under IHC’s newly launched international financial services platform, Judan Financial, and is expected to benefit from focused strategic oversight, capital backing, and branding linkages as an “IHC Group company”. Of the total commitment, Rs 5,653 crore has already been infused, Rs 4,587 crore through preferential equity and Rs 1,066 crore as upfront warrant consideration, with the balance Rs 3,198 crore to be received over 18 months. The warrant infusion is guaranteed by First Abu Dhabi Bank.

With total assets under management (AUM) of Sammaan Capital at Rs 64,200 crore as on December 31, it remains a sizeable player in the mortgage segment. Sammaan Capital is expected to diversify beyond its core mortgage business into other lending segments in a calibrated manner over the next few years. With the company’s strategic focus on developing a more diversified and granular retail portfolio, on an asset light business model, the ability to maintain the asset quality metrics will also remain monitorable.