Sammaan Capital Ltd. (formerly known as Indiabulls Housing Finance Limited) has reported impressive collection and recovery figures for the third quarter of the financial year 2024-25 (Q3 FY25), showcasing a significant acceleration in collections from its legacy book. This performance is particularly noteworthy, considering the company's strategy of aggressively managing its legacy portfolio, which includes both loans already written off and those sold to asset reconstruction companies (ARCs).

Strong Collections from Legacy Portfolio
The company has been making strides in recovering dues from properties and loans that were once considered at risk. A key driver behind this success is the strong recovery traction in legacy portfolio collections, which has exceeded the targeted ₹3,750 Crs for the quarter, reaching over ₹3,900 Crs. This is a notable achievement considering the legacy nature of these assets. This outperformance also follows a solid collection of ₹5,864 Crs in the first half of FY25, reflecting the company’s effective recovery strategies and the favorable market conditions in the real estate sector.

Significant Recovery Events
Among the prominent recovery events, the company reported a breakthrough with one of its premium projects in Central Mumbai, which received its occupation certificate (OC) and saw the sale of five apartments at an average price of ₹72 Crs each. From this project alone, Sammaan Capital has already received ₹175 Crs, and it anticipates an additional ₹1,000 Crs in collections over the next year. The robust demand for luxury real estate in Mumbai continues to be a driving factor in these collections.

Another key event was the accelerated collections from a super-luxury project in South Mumbai, where the first tranche of approximately ₹210 Crs of expected collections has already been received. The company expects this project to unlock another ₹1,000 Crs over the next 12 months, further adding to the positive outlook for its legacy portfolio.

Recovery from Repossessed Properties
In addition to real estate sales, Sammaan Capital also reported a recovery of ₹220 Crs from a private equity (PE) fund's purchase of repossessed property in Powai, Mumbai. These recoveries are vital as they contribute directly to improving the company’s financial health and reducing its non-performing assets (NPAs).

Court Judgments Unlocking Large Recoveries
A significant portion of the company's recent recovery success comes from favorable court judgments in the National Capital Region (NCR), which are expected to unlock around ₹750 Crs of collections over the next 12 months. This is a promising indicator that the company's legacy portfolio is not only seeing strong traction but also benefiting from legal and regulatory support in resolving distressed assets.

Strategy to Reduce Legacy Loan Book
Sammaan Capital's efforts to reduce its legacy loan book have included the sale of delinquent pools of loans to ARCs. These transactions are part of the company's broader strategy to wind down its legacy portfolio, which is expected to see quicker resolution and reduced exposure over time. The buoyant real estate market, especially in premium and super-luxury segments, has made it easier for the company to realize higher-than-expected values for these assets, which in turn has accelerated the collection process.

This strong performance in Q3 FY25 highlights Sammaan Capital's ability to unlock value from its legacy book, even in a market that had previously presented challenges. The recovery and collection figures, along with favorable market conditions, have set the stage for a promising future for the company’s balance sheet.

As the company moves forward into the last quarter of FY25, the outlook remains optimistic with projections of continued recovery from its legacy loan book and further collections from the real estate assets. Sammaan Capital is confident that the faster-than-expected rundown of its legacy loan book will significantly reduce the risk profile of its portfolio, benefiting stakeholders in the long run.

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