Abu Dhabi-based IHC on Friday announced a 41.2 % stake in Sammaan Capital for nearly $ 1 billion, and it is betting on the long term growth opportunities in the domestic financial sector. However, with mid-size banks trading at valuations close to several NBFCs, investors need to be careful before making any fresh investments in NBFCs for the long-term.
The NBFC sector is once again on investor’s radar with Abu Dhabi- based International Holding Company (IHC) acquiring a controlling stake in Sammaan Capital along with the recent steps taken by the RBI to improve the fund availability for this sector.
It was no surprise that several NBFCs are trading close to their 52-week highs – Sammaan Capital ended Friday trade at Rs 164.9, down 2.7 %, and not too far from its 52-week high of Rs 170.2 that was reached on 10 December 2024.
Other leading players in the NBFC sector like Bajaj Finance ended flat on Friday at Rs 989.7, and not too far from its 52-week high of Rs 1036 that was reached on 24 September 2025. And Cholamandalam Financial Holdings ended 3.5% lower at Rs 1,841.3 and not too far from its 52-week high of Rs 2,299 that was reached on 21 July 2025.
IHC and Sammaan Capital deal
Abu-Dhabi based IHC announced on Friday that it was acquiring a 41.2% stake in Sammaan Capital for Rs 8,850 crore. Sammaan Capital had a consolidated net loss of Rs 1,807.5 crore during FY 25.
The above acquisition has been done at nearly 2.5 times Sammaan Capital’s consolidated revenue from operations of Rs 8,623.3 crore for FY25.
The open offer for an additional 26% stake in Sammaan Capital will be at Rs 139 per share. Shareholders of Sammaan Capital will be keeping a close eye on the daily fluctuations in this stock price and the open offer price.
In a press release statement, it was highlighted that IHC’s $ 1 billion in investment underscores its conviction in the long-term potential of India’s financial sector and its commitment to expanding access to capital, accelerating innovative credit solutions, and supporting inclusive growth.
Other players in the sector like Cholamandalam Financial Holdings trade at a multiple – market capitalisation to FY 25 consolidated revenues of little more than one times.
Steps taken by RBI for NBFC sector
The RBI over the last few days has announced several steps to improve the fund availability of NBFCs. For instance, in its new proposed RBI guidelines, it has removed the limits on foreign currency loans a regulated NBFC is allowed to raise.
Also, to reduce the cost of infrastructure financing by NBFCs, the RBI has proposed to reduce the risk weights applicable to lending by NBFCs to operational, high quality infrastructure projects.
Performance in the June 2025 quarter
Sammaan Capital reported a consolidated net profit of Rs 334.3 crore in the June 2025 quarter, a growth of 2.5% on a y-o-y basis. The NBFC has highlighted that its net interest margin was 6.9 % in the June 2025 quarter vis-à-vis 6.2 % in the March 2025 quarter. Also, its net NPA was 0.8 % in the June 2025 quarter vis-à-vis 0.8% in the March 2025 quarter.
Cholamandalam Financial Holdings reported an 8.6 % y-o-y growth in its consolidated net profit of Rs 1,259.5 crore in the June 2025 quarter.
Outlook and Valuations
Sammaan Capital trades at a P/E of nearly 10 times estimated consolidated FY 26 earnings. Cholamandalam Financial Holdings trades at a P/E of nearly 15 times estimated consolidated FY 26 earnings.
The mid-size bank, Federal Bank trades at a P/E of nearly 12 times estimated standalone FY 26 earnings.
So, is this deal is a sign that better times are ahead for the NBFC sector? Well, only time will tell.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family have no shareholding in any of the stocks mentioned in the article.
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