Broker’s call: Sammaan Capital (Buy)

Sammaan Capital, formerly known as Indiabulls Housing Finance, has undergone a transformation from a company plagued by risk to one that is now seen as an early-stage re-rating opportunity. The company's journey has been marked by rapid growth through wholesale and developer lending, but this growth was often accompanied by mounting asset-quality stress and funding-access challenges.

By the end of FY20–24, Sammaan Capital was experiencing deeply negative profitability and a significant stock of non-performing assets (GNPA) that required a substantial ₹6,499 crore impairment to rectify. However, the tide began to turn with strategic intervention from Indiabulls Housing Finance (IHC), which provided a two-tranche ₹8,850 crore capital infusion, giving Sammaan Capital a 43.5% controlling stake.

This move led to upgrades in credit ratings from Crisil, CARE, and ICRA, and opened up access to lower-cost borrowings. With these improvements, Sammaan Capital has moved past its troubled phase and is now poised for growth. The investment case is based on the company's strengthening profitability, the support from IHC in terms of capital and governance, and the improving asset quality.

The outlet initiates coverage with a BUY rating and sets a price target of ₹377.7, which is 2.0 times the forecasted FY29 earnings per adjusted book value (P/ABV). However, the investment is not without risks. The outlet warns of the potential for rapid scaling up in retail and MSME-LAP sectors without adequate underwriting discipline, which could lead to seasoning-led delinquencies and impact the GNPA and credit costs.