CCI's Clearance Of Avenir–Sammaan Deal: Implications For Competition, Capital, And India's NBFC Future
Dr. Rafique Khan
19 Dec 2025 2:30 PM IST
A Transaction That Extends Beyond Procedural Approval
The Competition Commission of India (CCI) has approved 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). Although the PIB press release makes the approval appear routine, the underlying transaction speaks to broader shifts occurring within India's financial landscape—particularly the rising participation of global investment conglomerates in the non-banking financial sector. The CCI's green signal indicates an absence of immediate competitive harm, but the implications reach far deeper than a simple merger clearance, touching upon issues of ownership concentration, credit-market consolidation, foreign capital dynamics, and evolving regulatory roles.
The Acquirer and the Target: Understanding the Corporate Profiles
Avenir Investment RSC Ltd. has been created specifically for this acquisition and forms part of the sprawling IHC Group, a major Abu Dhabi-listed conglomerate with interests that span finance, manufacturing, healthcare, real estate, renewable energy, logistics, and leisure. Its expanding Indian footprint reflects a larger geopolitical and economic trend in which Middle Eastern sovereign and private investors are increasingly channelling capital into India's financial and digital markets. Sammaan Capital Limited—the target—is registered with the Reserve Bank of India as a Non-Banking Financial Company (Investment and Credit Company – Upper Layer). This “Upper Layer” classification under the RBI's Scale-Based Regulation (SBR) framework places SCL among NBFCs considered systemically significant, requiring enhanced governance and prudential norms. SCL's portfolio spans retail home loans, commercial project loans, MSME financing, business loans, lease-rental discounting, and allied services like insurance distribution and asset acquisitions. It occupies an influential position in segments underserved by traditional banks, especially in real estate-linked and SME credit markets.
NBFCs in India: A Sector Under Transformation
India's NBFC sector has experienced a period of intense evolution, marked by both rapid expansion and significant stress. Once peripheral to mainstream banking, NBFCs have emerged as indispensable credit intermediaries, particularly in the domains of housing finance, infrastructure-linked lending, MSME credit, and consumption-driven borrowing. The IL&FS and DHFL crises underscored the systemic risks built into the sector, prompting the RBI to introduce tighter capital norms, supervision requirements, and the SBR regime. As regulatory stringency increases, NBFCs require larger and more patient capital pools to stay competitive. This has made them attractive targets for global investors and sovereign funds seeking exposure to India's credit growth story. The Avenir–Sammaan transaction must be situated within this broader context of shifting capital flows and deepening foreign investment appetite in India's non-bank lending ecosystem.
The Competition Law Lens: Why the CCI's Approval Matters
At first glance, the CCI's approval under the Green Channel mechanism suggests that no substantive competitive concerns were identified. Green Channel filings are permitted only when the parties demonstrate that the combination has no horizontal overlaps, vertical linkages, or potential for foreclosure. In this case, Avenir and the IHC Group do not appear to 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 considerations that extend beyond conventional market-share assessments. One concern is whether consolidation of NBFCs under large global conglomerates could reduce effective borrower choice, particularly at regional levels where competition is already limited. While credit markets appear fragmented nationally, functional competition in real estate financing, MSME lending, or urban housing loans may operate within narrower geographic or demographic pockets. A second 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—all factors that may crowd out smaller, domestically anchored institutions. Though aggressive competition may benefit borrowers in the short term, it can diminish market diversity and resilience over time. A third issue is the entanglement of competition dynamics with financial stability. While the RBI is responsible for prudential oversight, competitive pressures can influence risk-taking behaviour. If foreign-backed NBFCs expand rapidly into riskier asset classes, the long-term implications may not comfortably sit within traditional competition analysis but still warrant regulatory foresight.
Foreign Capital and India's Financial Architecture: Opportunities and Risks
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 triggered by geopolitical tensions, interest-rate cycles, or macroeconomic volatility. 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. Additionally, foreign-owned NBFCs that specialise 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.
Regulatory Interplay: The CCI, RBI, and the Need for Coordinated Oversight
The Avenir–Sammaan transaction underscores the increasing need for coordinated regulatory vigilance between the CCI and 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 accordingly.
A Transaction Symbolic of India's Financial Future
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 shape much of 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.
Author is Assistant Professor (Law), School of Law, UPES Dehradun. Views Are Personal.
References
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2201086®=3&lang=2