Even as Indiabulls is gearing up for a fundraise in the next 12-18 months. it is set to get a new identity as Samman Capital, shedding its housing finance tag to operate as non-banking finance company.
Gagan Banga, Vice-Chairman, Managing Director and CEO of Indiabulls Housing, told businessline that though the company is in no immediate need to raise capital or bring in new investors, “Several proposals are being evaluated, such as whether we should look at private equity investors or corporate houses showing interest in us, but there is no deal at the moment.”
With the de-promoterisation and exit of Sameer Gehlaut from the company, it is set to get a new identity as Samman Capital. With the regulatory approvals for the new name coming through, rebranding exercises are currently underway and the new identity should be formalised in the next 45 days or so.
Unlike Indiabulls Housing, which predominantly licenses as a housing finance company (HFC), Samman Capital is expected to operate as non-banking finance company, shedding its HFC tag. “With scale-based regulations in place, there is barely any advantage in asset-based classification of NBFCs and hence it makes sense to operate as NBFC rather than just a NBFC-HFC,” explained Banga. Indiabulls Housing is classified by the RBI as upper layer NBFC.
However, he was quick to assert that even in the renewed format of functioning, the company would remain focused on mortgages and retail lending. In fact, the asset-light strategy etched out in 2019 — which revolved around co-lending, securitisation and holding a small portion of loans originated on-balance sheet — will remain the focus of the Indiabulls Housing in its new avatar.
Focus on growth
The earlier slated plan to carve out the retail and wholesale businesses of Indiabulls Housing into two separate entities is said to be shelved for now. “The plan is to focus on growth,” said Banga. By FY26 the company plans to improve its return on equity to 15 per cent and return on assets to three per cent from the present level of 1.7 per cent. Presently, the lender sources about ₹600-800 crore of retail loans and this run rate is expected to improve in the second half of FY24.
Meanwhile, ₹5,500 crore of debt has been repaid by the company in the last three months, and with ₹2,000 crore of outstanding likely to be repaid in the ongoing quarter, the interest burden of is expected to substantially reduce. “Work is also ongoing to further reduce the share of wholesale loans,” said Banga. Wholesale loans comprised of commercial real estate loans and business loans stood at 29 per cent and 15 per cent respectively of the lender’s total assets, which stood at ₹74,945 crore as on March 31, 2023.