Small-Cap Stock Surged by 9 per cent: This Financing Company Reported Strong traction in collections from Legacy Book
The stock price is trading at 0.55 times its book value.
On Thursday, the share price of Sammaan Capital Ltd surged by 9 per cent, reacting to the strong business update of Q3 FY25. In the quarter gone by [Q3 FY2024-25] and the month of January 2025 to date, the Company has seen strong collections and recovery traction from its legacy portfolio, including from the portfolio already provided for, and from pools sold to asset reconstruction companies [ARCs]. The following are some recent significant collection events from the legacy portfolio:
DSIJ offers a service 'Pop Options" with recommendations for profitable options based on research and analysis to help subscribers make healthy profits. If this interests you, then do download the service details pdf here
- A premium project in Central Mumbai received occupation certificate [OC] and sold 5 apartments at an average of Rs 72 Crore each. Company has already received Rs 175 Crore from this project. This event unlocks ~Rs 1,000 Crore of collections in the next 12 months
- Accelerated collections from a super-luxury project in South Mumbai. The first tranche from ~Rs 210 Crore of expected collections by March 2025 has been received. This event also unlocks another Rs 1,000 Crore of collections in the next 12 months
- Recovery of Rs 220 Crore following a large PE fund’s purchase of repossessed property in Powai, Mumbai
- Received favourable court judgements unlocking recoveries of ~Rs 750 Crore in the NCR region in the next 12 months Against a targeted collection of Rs 3,750 Crore in Q3FY25 from the legacy book, the Company saw collections in excess of Rs 3,900 Crore.
This strong collection traction from the legacy book builds on the Rs 5,864 Crore of collections in H1FY25. Supported by a buoyant real estate market, the legacy portfolio is seeing robust collections and superior price realization. This extends to strong collection traction from the written-off/provided for pool, including from pools sold to ARCs, as buyers are seeing good value in picking repossessed properties or properties from stressed borrowers. To spur speedy collections from delinquent pools, in Q3FY25 also the Company sold delinquent pools of loans from the legacy book to ARCs. The Company is very positive about quicker than expected run down of its legacy loan book.
Sammaan Capital Ltd (Indiabulls Housing Finance Ltd), incorporated in 2005, is registered with and regulated by National Housing Bank (NHB) and is engaged in the business of providing home loans and loan against property. It also provides corporate mortgage loan - lease rental discounting and residential construction finance.
The company has a market capitalisation of Rs 11,376 crore. Shares of Sammaan Capital are trading at Rs 154 per share while it has recorded a 52-week high of Rs 209 and 52-week low of Rs 130. The stock price has given returns of 10 per cent in last one month. Stock is trading at 0.55 times its book value.
Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.