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CCI's approval of the Avenir–Sammaan deal signals deeper foreign investment in NBFCs and raises key competition and regulatory questions in India.
- A transaction that extends beyond procedural approval
The approval granted by the Competition Commission of India to the Avenir–Sammaan deal marks an important moment in India's evolving financial and competition law landscape. At one level, the clearance under Combination Registration No. C-2025/10/1340 appears routine, especially given that it was approved without prolonged investigation. Yet, when viewed in the broader context of India's non-banking financial sector, foreign capital inflows, and regulatory convergence, the transaction represents far more than a formal merger clearance.
The transaction involves the acquisition of a significant shareholding in Sammaan Capital Limited by Avenir Investment RSC Ltd., a special-purpose vehicle of the Abu Dhabi based International Holding Company PJSC. While the Press Information Bureau communication framed the approval as a standard competition law decision, the underlying economic and regulatory implications stretch across India's credit markets, capital flows and future of NBFC governance.
This article examines the CCI's approval through a competition law lens, situates it within India's NBFC transformation, and analyses what such foreign-backed acquisitions mean for market structure, financial stability, and regulatory coordination in India.
- The acquirer and the target: understanding the corporate profiles
Avenir Investment RSC Ltd. has been created specifically to undertake this acquisition and operates as part of the broader IHC Group. International Holding Company PJSC is one of Abu Dhabi's most diversified listed conglomerates, with investments spanning financial services, manufacturing, healthcare, energy, infrastructure, logistics, and digital platforms. Over the last few years, IHC has emerged as a significant global investor, increasingly focusing on high-growth markets in Asia, including India.
Avenir's entry into India through the Sammaan Capital transaction reflects a deliberate strategy of Middle Eastern investment houses seeking long-term exposure to India's financial services ecosystem. Unlike traditional portfolio investments, such acquisitions signal patient capital, governance participation, and a strategic bet on India's domestic credit expansion.
Sammaan Capital Limited, on the other hand, occupies a critical position in India's non-bank lending space. Registered with the Reserve Bank of India as a Non-Banking Financial Company, Investment and Credit Company (Upper Layer), Sammaan Capital falls within the systemically significant category under the RBI's Scale-Based Regulation framework. This Upper Layer classification subjects the NBFC to enhanced governance norms, stricter capital adequacy requirements, and closer supervisory oversight.
Sammaan Capital's lending portfolio spans retail home loans, commercial real estate finance, MSME lending, business loans, lease rental discounting, and allied activities such as insurance distribution and asset acquisitions. In several semi-urban and urban markets, NBFCs like Sammaan Capital provide credit where traditional banks either lack appetite or face operational constraints. This positioning makes Sammaan Capital a crucial intermediary in India's housing and SME credit ecosystem.
- India's NBFC sector under transformation
India's NBFC sector has undergone a fundamental transformation over the past decade. Once seen as peripheral lenders, NBFCs have become central to credit delivery in housing finance, infrastructure-linked lending, MSME credit, and consumer finance. Their flexibility, speed of execution, and sectoral specialisation have allowed them to fill gaps left by conventional banking institutions.
However, this growth has not been without stress. The IL&FS collapse, followed by the DHFL crisis, exposed structural vulnerabilities related to asset-liability mismatches, governance weaknesses, and over-reliance on short-term funding. These episodes triggered systemic concerns and prompted the RBI to overhaul NBFC regulation through the Scale-Based Regulation framework.
Under the SBR regime, NBFCs are classified into Base, Middle, Upper, and Top Layers, with progressively stringent compliance obligations. For Upper Layer NBFCs such as Sammaan Capital, the cost of compliance, capital adequacy, and governance has increased substantially. This has, in turn, intensified the need for stable, long-term capital.
Against this backdrop, global investors and sovereign-linked funds have identified Indian NBFCs as attractive vehicles to participate in India's credit growth story. The Avenir–Sammaan transaction is emblematic of this shift, where foreign capital is not merely supplementing liquidity but reshaping ownership structures in systemically relevant NBFCs.
- The competition law lens: why the CCI's approval matters
From a technical perspective, the CCI's approval suggests that the transaction did not raise immediate competition concerns under the Competition Act, 2002. The parties appear to have qualified for clearance under the Green Channel mechanism, which is available only when the acquirer and target have no horizontal overlaps, vertical relationships, or complementary activities that could raise foreclosure risks.
Avenir and the broader IHC Group do not operate as lenders in the Indian NBFC market, nor do they appear to have upstream or downstream linkages with Sammaan Capital's lending activities. On this basis, the combination was assessed as unlikely to cause an appreciable adverse effect on competition in any relevant market.
Yet, financial sector combinations often warrant a deeper analytical lens than conventional market share analysis. Credit markets are characterised by information asymmetry, regional segmentation, and sector-specific concentration. While India's NBFC sector appears fragmented at a national level, effective competition often operates within narrower geographic or borrower-specific markets, such as affordable housing finance in Tier-II cities or MSME lending clusters.
The entry of deep-pocketed foreign investors into such markets can alter competitive dynamics in subtle but significant ways. NBFCs backed by global conglomerates can sustain lower margins for longer periods, invest aggressively in technology and underwriting, and scale operations rapidly. While this may benefit borrowers in the short term through competitive pricing, it may also crowd out smaller domestic NBFCs that lack comparable capital buffers.
- Ownership concentration and competitive neutrality
One of the less discussed aspects of NBFC consolidation is ownership concentration. Competition law traditionally focuses on market concentration measured through lending volumes or asset size. However, in the financial sector, ownership concentration can be just as influential as operational concentration.
When multiple NBFCs across different segments come under the influence of a small number of global capital providers, competitive neutrality concerns can arise. Shared funding sources, aligned investment strategies, or indirect influence through common shareholders may soften competition over time, even in the absence of formal coordination.
In the Avenir–Sammaan case, there is no indication of such cross-holdings within India's NBFC market. Nevertheless, the transaction highlights a broader trend where foreign investment conglomerates are becoming significant stakeholders in India's credit intermediaries. As this trend accelerates, competition authorities may need to pay closer attention to conglomerate effects and indirect influence structures in financial markets.
- Competition and financial stability: a delicate balance
Another dimension where competition analysis intersects with broader policy concerns is financial stability. While the RBI is the primary regulator responsible for prudential oversight, competition dynamics can influence risk-taking behaviour in NBFCs.
Aggressive competition for market share, particularly when fuelled by abundant foreign capital, can incentivise expansion into higher-risk lending segments such as speculative real estate finance or unsecured MSME credit. If multiple foreign-backed NBFCs pursue similar growth strategies, systemic risks may build up, even if individual institutions remain compliant with regulatory norms.
The CCI's mandate does not extend to financial stability per se, yet competition outcomes in the NBFC sector can have systemic implications. The Avenir–Sammaan approval underscores the importance of regulatory dialogue between competition authorities and financial regulators, particularly as India's financial markets become more integrated with global capital flows.
- Foreign capital and India's credit architecture
Foreign investment in India's financial sector has traditionally been associated with banks, insurance companies, and capital markets. In recent years, however, NBFCs and fintech-driven lenders have emerged as preferred entry points for global investors seeking exposure to India's domestic consumption and infrastructure growth.
Such capital brings clear advantages. Foreign investors often demand stronger governance standards, improved disclosure practices, and professional management. They can also lower the cost of capital for NBFCs, enabling them to pass on benefits to borrowers and invest in risk management systems.
At the same time, increased foreign ownership in NBFCs raises important policy questions. Over-reliance on external capital can expose India's credit markets to global shocks, including geopolitical tensions, shifts in global interest rates, or changes in foreign investment sentiment. Sudden withdrawal or reallocation of capital by global investors could amplify volatility in domestic credit availability.
In sectors such as real estate finance, where NBFCs play a significant role, foreign-backed expansion can also influence asset prices and developer behaviour. While these effects may be incremental, their cumulative impact warrants careful monitoring by regulators.
- The RBI–CCI regulatory interplay
The Avenir–Sammaan transaction illustrates the increasingly interconnected roles of the CCI and the RBI. While the RBI assesses changes in shareholding and control from the perspective of "fit and proper" criteria, capital adequacy, and governance, the CCI evaluates the impact on market competition.
As NBFCs evolve into systemically significant institutions with complex ownership structures, the boundaries between competition law and financial regulation are becoming more porous. Effective oversight will require not just parallel review processes, but meaningful coordination between regulators.
Future NBFC mergers and acquisitions, especially those involving foreign investors or conglomerate groups, may demand more nuanced assessments that consider conglomerate effects, indirect control, and long-term market structure implications. The Avenir–Sammaan approval may therefore serve as a reference point for how Indian regulators approach such transactions going forward.
- Beyond clearance: strategic implications for the NBFC sector
For Sammaan Capital, the entry of Avenir and the IHC Group offers access to stable capital, global expertise, and enhanced credibility in domestic and international markets. This could strengthen its competitive position in housing finance and MSME lending, particularly as regulatory compliance costs continue to rise.
For the NBFC sector more broadly, the transaction signals that India remains an attractive destination for long-term foreign capital, even in heavily regulated segments. It also reinforces the trend towards consolidation, where only well-capitalised NBFCs with strong governance frameworks can sustainably compete.
Smaller NBFCs may face increasing pressure to either specialise further, merge with larger players, or seek strategic investors to remain viable. From a competition policy perspective, managing this consolidation in a way that preserves market diversity and borrower choice will be a key challenge.
- A transaction symbolic of India's financial future
The CCI's clearance of the Avenir-Sammaan deal is more than a routine antitrust approval. It reflects the maturation of India's competition law regime, the growing sophistication of its financial markets, and the deepening integration of global capital into domestic credit systems.
While the transaction does not appear to raise immediate competition concerns, it brings into focus critical questions about ownership concentration, competitive neutrality, and the long-term role of foreign capital in India's NBFC ecosystem. As India pursues its ambition of becoming a $5-trillion economy, NBFCs will play a central role in financing housing, infrastructure, and entrepreneurship.
Ensuring that this growth remains competitive, resilient, and inclusive will require vigilant oversight by regulators, informed competition analysis, and a willingness to adapt regulatory frameworks to evolving market realities. The Avenir–Sammaan approval stands as a reminder that in modern financial markets, merger clearances are not merely procedural events, but signals of deeper structural change in the economy.
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