Carlyle Group Secures Majority Stake in Nido Home Finance in Landmark ₹2,100 Crore Deal
In a significant move within India's financial landscape, US-based global asset manager The Carlyle Group Inc. has announced the acquisition of a majority stake in Nido Home Finance Ltd, the housing loan subsidiary of Edelweiss Financial Services Ltd. The transaction, valued at a substantial ₹2,100 crore, was formally disclosed to the stock exchanges on Monday by the Rashesh Shah-led financial services conglomerate.
Transaction Structure and Stake Acquisition
The deal involves investment funds associated with Carlyle Asia Partners—specifically CA Sardo Investments and Salisbury Investments Pvt. Ltd, the family office of former HDFC Bank chief Aditya Puri. Together, these entities will acquire a 45% stake in Nido from Edelweiss through a secondary purchase. Additionally, they will execute a primary equity capital infusion of ₹1,500 crore into the housing finance company.
Through a strategic combination of share purchases and warrant acquisitions, the Carlyle-affiliated funds are set to collectively secure a controlling majority stake in Nido Home Finance. Upon full completion of the transaction, these funds are projected to hold approximately 73% of the company on a fully diluted basis, cementing their dominant position.
Aditya Puri, who serves as a senior adviser to Carlyle's Asia private equity team, brings his extensive banking expertise to this partnership, adding significant strategic value to the investment.
Financial Details and Premium Valuation
The secondary transaction component will see Edelweiss divest 31.2 million shares for ₹602 crore. As part of the primary capital infusion, Nido will issue 25.7 million fresh shares to CA Sardo Investments and an additional 185,000 shares to Salisbury Investments. All share issuances are priced at ₹193 per share.
Furthermore, CA Sardo will receive 514 million fresh warrants, while Salisbury will obtain 369,000 warrants, each also priced at ₹193. Notably, this issue price represents a substantial 73% premium over Nido's closing stock price on the preceding trading day, underscoring the strong confidence in the company's growth trajectory and the housing finance sector's potential.
Edelweiss has indicated that it may also benefit from an upside share arrangement, contingent upon Carlyle achieving returns above a predefined threshold, aligning incentives for long-term value creation.
Regulatory Timeline and Legal Advisers
The acquisition is subject to customary regulatory approvals and is anticipated to be finalized by 31 July 2026. For this transaction, AZB & Partners provided legal counsel to Edelweiss Financial Services, while Trilegal acted as the legal adviser to The Carlyle Group, ensuring a smooth and compliant process.
Strategic Rationale and Market Context
In fiscal year 2024-25, Nido Home Finance contributed 5.5% to Edelweiss's total revenue, amounting to ₹521 crore, and represented 14% of the parent company's net worth. Edelweiss, in an investor presentation, characterized the deal as a "win-win-win" scenario for all stakeholders involved.
For Edelweiss, this transaction advances its strategic objective of unlocking value from its portfolio. For Nido, the infusion of fresh capital from a globally renowned investor like Carlyle is expected to reinforce its growth momentum and expand its market reach. For Carlyle, this acquisition represents a strategic entry point into India's burgeoning housing finance sector, a market with significant long-term potential.
"We are thrilled to partner with Edelweiss to support the next phase of Nido’s growth journey," stated Sunil Kaul, partner and Asia financial services sector lead at Carlyle. "Housing remains a critical national priority for India, and we have strong conviction in the growth potential of the housing finance industry."
Nido Home Finance: Profile and Operations
Established in 2010, Nido Home Finance specializes in providing home loans targeting the affordable housing and mass-market segments across India. The company boasts an extensive operational footprint, serving over 800 talukas nationwide. As of the latest data, Nido manages a robust asset portfolio worth ₹4,804 crore, demonstrating its established presence in the sector.
Broader Industry Trends and Recent Deals
This transaction marks the second major housing finance deal announced within a single week, highlighting heightened investor interest in the sector. On 3 February, private equity firm Advent International revealed plans to acquire a 14.3% stake in Aditya Birla Housing Finance Ltd for ₹2,750 crore, valuing that company at ₹19,250 crore on a post-money basis.
The deal occurs against a backdrop where housing finance companies (HFCs) are increasingly diversifying into non-housing loans to safeguard margins and sustain growth. According to a January 2026 report by ratings agency Icra Ltd, HFCs are projected to experience healthy asset under management (AUM) growth of 15-17% during 2025-26 and 2026-27.
The report further notes that growth in the non-home loans segment has been accelerating over recent quarters, with its share expected to increase further in the near term due to competitive pressures in the housing loan segment and margin constraints.
Government Initiatives and Economic Support
The Economic Survey 2025-26, released on 29 January 2026, highlighted that housing loans as a percentage of India's gross domestic product (GDP) have risen to 11% in FY25, up from 8% in FY15. This growth is attributed to various demand-side measures, including interest subvention under the Pradhan Mantri Awas Yojana (Urban), the Affordable Housing Fund, lower interest rates, and streamlined credit processes, all of which have enhanced access to housing finance.
Additionally, urban development initiatives such as the Smart Cities Mission and the Urban Infrastructure Development Fund (UIDF) have bolstered housing demand in tier-II and tier-III cities, creating a favorable environment for companies like Nido Home Finance to thrive.
This strategic acquisition by The Carlyle Group not only underscores the attractiveness of India's housing finance market but also sets the stage for accelerated growth and innovation in the sector, benefiting homebuyers and investors alike.
