Samaan Capital Limited, a leading player in India’s financial services sector, plans to start issuing Tranche II Non-Convertible Debentures (NCDs) in December 2024. With a base issue size of Rs 100 million and a greenshoe option of Rs 200 million, this secure NCD offering is aimed at providing stable returns to investors. In this article: Samaan Capital NCD – December 2024 We cover company background, interest rates, credit ratings, financials, investment reasons, risks, and subscription process in detail.
About Saman Capital Limited
Sammaan Capital was initially established as Indiabulls Housing Finance Limited but underwent a transformation in 2024 to become a Non-Banking Financial Company (NBFC). The company leverages its expertise in credit and investment services and focuses on providing secure lending solutions. Headquartered in New Delhi, Sammaan Capital boasts a robust financial services infrastructure and a professional management team. It is a member of the India Bulls group.
Sammaan Capital NCD – December 2024 – Issue Details
Here are the details of the problem:
| Issues in issue | December 9, 2024 – December 20, 2024 |
| security name | Saman Capital Limited |
| Type of security | Secured, redeemable, non-convertible debentures (Secured NCDs) |
| Publication size (base) | 100 million rupees |
| Publication size (oversubscription) | 200 million rupees |
| Tranche issue size | 300 million rupees |
| Issue size (shelf) | 2 billion rupees |
| Tranche number | II |
| Issue price | 1000 rupees per NCD |
| face value | Each NCD 1000 rupees |
| minimum lot size | 10NCD |
| market lot | 1NCD |
| Exhibition location | BSE, NSE |
| credit rating | Stable by CRISIL AA/CRISIL Ratings Limited [ICRA] AA (Stable) by ICRA Limited. |
| tenor | 24, 36, 60, 84, 120 months |
| series | Series I-XII |
| payment frequency | Monthly, annual, cumulative |
| Basis for allocation | First come first served |
| bond trustee | Idobi Trusteeship Services Co., Ltd. |
Sammaan Capital NCD – December 2024 – Interest Rates and Tenure
NCDs are offered across multiple series with different terms and interest rates, allowing investors to choose based on their financial goals. Key highlights include:
- Coupon price: Competitive interest rates across the series, with interest paid on a monthly, annual, or cumulative basis.
- Tenure options: Options range from 24 months to 120 months.
Click here for details on interest rates and coupons.
| option | I | II | Ⅲ | Ⅳ | V | VI | VII | VIII | IX | × | XI | XII |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest payment frequency | yearly | monthly | cumulative | yearly | monthly | cumulative | yearly | monthly | yearly | monthly | yearly | monthly |
| Tenure (months) | twenty four | twenty four | twenty four | 36 | 36 | 36 | 60 | 60 | 84 | 84 | 120 | 120 |
| Coupon (% per year) | 9.65% | 9.25% | N.A. | 9.90% | 9.48% | N.A. | 10.15% | 9.71% | 10.50% | 10.03% | 10.75% | 10.25% |
| Effective yield (%/year) | 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 at maturity (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 – December 2024 – Credit Rating
The NCD stock is rated ‘CRISIL AA/Stable’ by CRISIL Ratings.[ICRA] “AA (Stable)” (ICRA Limited) These ratings reflect a high degree of security and low credit risk regarding timely repayment of financial obligations. For more information, please see details on the BSE website. Sammaan Capital NCD – December 2024 Prospectus
Financial overview
Sammaan Capital has shown consistent financial performance.
- Assets under management (AUM): Significant growth in recent years.
- Profitability: A positive PAT number indicates superior operational efficiency.
- Net worth: Strong capital base ensuring adequate risk coverage.
(Amount (INR 1000 Rupees))
| Period ends | March 31, 22 | March 31, 23 | March 31, 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 |
Sammaan Capital NCD – Why invest in December 2024?
- high credit rating : CRISIL AA/Stable [ICRA] The AA (Stable) rating reflects the assurance of timely payment of interest and principal. These high ratings provide confidence in Samaan Capital’s creditworthiness, making NCDs a safer investment option for conservative investors.
- Safe NCD with strong asset backing: The NCD is secured by the first pari passu claim on financial and non-financial assets of Samaan Capital. A minimum guaranteed amount of 1.25x ensures investor protection.
- Variety of tenure and interest payment options: NCD terms range from 24 to 120 months and accommodate both short-term and long-term investment objectives. Additionally, investors can choose between monthly, annual, or cumulative interest payments, giving them flexibility to meet their liquidity needs.
- Attractive yield compared to fixed deposits: The coupon interest rates offered are usually higher than bank fixed deposit rates, making these NCDs an attractive option for those seeking higher returns in fixed income products.
- Tax savings for certain investors: Investors, such as corporations and institutions, may enjoy tax advantages by investing in NCDs compared to other products, depending on their tax liability and applicable laws.
- Growth in Sammaan Capital’s financial profile: The company has consistently shown growth in financial metrics, including profitability and a well-capitalized balance sheet. This makes NCDs safer as a low-risk investment.
Risk factors for these NCDs
- Interest rate risk: Although NCDs offer a fixed return, the returns on these corporate bonds may become less attractive over time due to rising market interest rates. In a rising interest rate environment, investors may miss out on high-yield opportunities.
- Credit risk: Despite a high credit rating, there is always the possibility that a credit event may occur that affects a company. Downgrades in credit ratings due to unforeseen financial or operational issues may affect the secondary market value of NCDs.
- Liquidity risk: If demand for NCDs is low, it may be difficult to sell NCDs in the secondary market before maturity. This risk is particularly relevant for NCDs with long holding periods, where investors may need to hold to maturity to avoid capital losses.
- 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 outstanding loans may be concentrated in certain sectors, increasing vulnerability to sectoral economic downturns.
- Regulatory and legal risks: Changes in the regulatory framework governing NBFCs may impact a company’s ability to generate revenue and meet its financial obligations. Ongoing litigation and compliance issues may also pose financial risks.
- Inflation risk: Fixed income from NCDs may lose purchasing power if inflation increases significantly during the investment period.
- Risk of default and non-payment: Although this is unlikely given the company’s credit rating, any disruption to Samaan Capital’s cash flow could lead to delayed or missed payments to NCD holders.
How to buy Sammaan Capital NCD?
Investors can apply for these NCDs through:
- ASBA process: Via Self-Certified Syndicate Bank (SCSB).
- broker: Submit your application through a registered securities dealer.
- Online platform: Digital channels offering direct NCD subscription options.
Sammaan Capital NCD – December 2024 – Invest or avoid?
Sammaan Capital NCD issue presents an opportunity for investors seeking stable fixed returns with low risk.
However, potential risks such as market volatility and liquidity constraints are some of the key risk factors.
Such NCDs are perfect for investors who can take risks and are looking for fixed income investments in their portfolio.
