CCI's Approval of Avenir–Sammaan Deal: Implications for India's Financial Landscape

The Competition Commission of India (CCI) has granted approval for the acquisition (C-2025/10/1340) of a significant shareholding in Sammaan Capital Limited (SCL) by Avenir Investment RSC Ltd., a special-purpose vehicle of the Abu Dhabi-based International Holding Company PJSC (IHC). While the approval seems routine, the underlying transaction underscores significant shifts in India's financial landscape, particularly the increasing involvement of global investment conglomerates in the non-banking financial sector (NBFC).

The CCI's green signal indicates an absence of immediate competitive harm. However, the implications of this deal are far-reaching, touching on issues of ownership concentration, credit-market consolidation, foreign capital dynamics, and the evolving roles of regulators.

Avenir Investment RSC Ltd. was created specifically for this acquisition and is part of the extensive IHC Group, a major Abu Dhabi-listed conglomerate with diverse interests in finance, manufacturing, healthcare, real estate, renewable energy, logistics, and leisure. IHC's growing presence in India reflects a broader trend where Middle Eastern sovereign and private investors are increasingly channeling capital into India's financial and digital markets.

Sammaan Capital Limited, the target of the acquisition, is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (Investment and Credit Company – Upper Layer). This classification under the RBI's Scale-Based Regulation (SBR) framework places SCL among NBFCs deemed systemically significant, subject to enhanced governance and prudential norms. SCL's portfolio includes retail home loans, commercial project loans, MSME financing, business loans, lease-rental discounting, and related services like insurance distribution and asset acquisitions. SCL holds a significant position in segments often underserved by traditional banks, particularly in real estate-linked and SME credit markets.

India's NBFC sector has undergone significant evolution, marked by both rapid expansion and substantial stress. Once considered peripheral to mainstream banking, NBFCs have become crucial credit intermediaries, especially in housing finance, infrastructure-linked lending, MSME credit, and consumption-driven borrowing. The crises at IL&FS and DHFL highlighted the systemic risks inherent in the sector, prompting the RBI to introduce stricter capital norms, supervision requirements, and the SBR regime. As regulatory oversight tightens, NBFCs need larger and more patient capital pools to remain competitive, making them attractive targets for global investors and sovereign funds seeking exposure to India's credit growth story.

The CCI's approval under the Green Channel mechanism suggests no immediate competitive concerns. Green Channel filings are permitted when parties demonstrate that the combination lacks horizontal overlaps, vertical linkages, or potential for foreclosure. In this case, Avenir and the IHC Group do not operate in the same or adjacent product markets as SCL, allowing the transaction to qualify for automatic clearance. However, financial-sector combinations raise unique competition concerns beyond conventional market-share assessments. One concern is whether the consolidation of NBFCs under large global conglomerates could reduce borrower choice, especially at regional levels where competition is already limited. Another concern is the effect of deep-pocketed foreign ownership on competitive neutrality. NBFCs backed by large global investors can absorb losses longer, price risk more aggressively, or scale rapidly, potentially crowding out smaller, domestically anchored institutions. While this may benefit borrowers in the short term, it can diminish market diversity and resilience over time. Additionally, the interplay between competition dynamics and financial stability is crucial. Competitive pressures can influence risk-taking behavior, and rapid expansion into riskier asset classes by foreign-backed NBFCs may have long-term implications that extend beyond traditional competition analysis.

The increasing participation of global investment funds in India's NBFC sector is part of a larger structural shift. As conventional banks remain cautious in certain lending segments, NBFCs have stepped in to fulfill unmet credit demand. Foreign capital can play a productive role in this transition by lowering borrowing costs, improving underwriting capacity through superior technology and risk analytics, and enhancing corporate governance standards. However, the risks associated with deep external capital penetration cannot be ignored. Overdependence on foreign-owned NBFCs may expose India to external shocks or sudden global capital shifts. The competitive landscape might also be skewed if foreign-backed NBFCs dominate key lending segments, pushing smaller players to the margins or driving consolidation not through efficiency but through capital asymmetry. Furthermore, foreign-owned NBFCs specializing in real estate financing can influence local housing markets, potentially contributing to asset inflation or creating new competitive imbalances among developers, borrowers, and financiers. These micro-level effects, although individually small, can accumulate into significant structural consequences for the economy.

The Avenir–Sammaan transaction underscores the increasing need for coordinated regulatory vigilance between the CCI and the RBI. While the RBI evaluates such acquisitions from the perspective of financial stability, governance, and capital adequacy, the CCI focuses on preserving competitive market structures. The demarcation of responsibilities is clear, but the interdependence between competition and financial risk requires a more integrated analytical approach, particularly as India becomes a more attractive destination for global financial capital. Future merger reviews involving NBFCs may require deeper scrutiny of conglomerate linkages, cross-border capital flows, indirect control structures, and potential conglomerate effects. The financial system's architecture is shifting from bank-dominated to a more hybrid model involving NBFCs, fintechs, foreign funds, and digital lenders. Competition law must evolve to keep pace with these changes.

The CCI's approval of Avenir's acquisition of Sammaan Capital is more than a procedural milestone. It reflects India's growing integration with global investment networks, the rising centrality of NBFCs, and the maturing sophistication of Indian competition law. While the transaction appears competitively benign, it highlights urgent questions about market concentration, credit governance, and the long-term implications of foreign capital's expanding role in India's financial ecosystem. As India advances toward its $5-trillion economic ambition, NBFCs will play a crucial role in shaping the country's credit trajectory. Ensuring that this growth remains competitive, resilient, and widely accessible will require regulators to remain agile and forward-looking. The Avenir–Sammaan clearance illustrates both the opportunities and the complexities of India's evolving financial marketplace and the importance of vigilant oversight as global capital becomes an increasingly influential architect of India's economic future.