Carlyle to buy Edelweiss' Nido Home Finance for ₹2,100 crore

Company Overview - The Carlyle Group Inc. will acquire the housing loan unit of Edelweiss Financial Services Ltd, Nido Home Finance Ltd, in a ₹2,100 crore deal [1] - Nido provides home loans to customers across affordable housing and mass-market segments, managing assets worth ₹4,804 crore [7] Deal Structure - Carlyle Asia Partners will acquire a 45% stake in Nido through a secondary purchase and a primary equity capital infusion of ₹1,500 crore [2] - Edelweiss will sell 31.2 million shares for ₹602 crore and issue 25.7 million fresh shares at ₹193 per share to CA Sardo Investments [3] - The share issue price represents a 73% premium over the stock's closing price on the previous trading day [4] Stake Distribution - Upon completion, Carlyle's funds will hold approximately 73% of Nido on a fully diluted basis [3] - CA Sardo and Salisbury will receive fresh warrants priced at ₹193 each [4] Financial Impact - In fiscal 2024-25, Nido contributed 5.5% to Edelweiss's top line, amounting to ₹521 crore, and 14% to the company's net worth [5] Strategic Rationale - The transaction is viewed as a "win-win-win" for all stakeholders, advancing value creation for Edelweiss, reinforcing growth for Nido, and providing Carlyle with entry into India's housing financing sector [6] Market Context - The deal occurs amid a trend where housing finance companies (HFCs) are increasingly relying on non-housing loans to protect margins and growth [9] - Icra Ltd expects healthy growth of 15-17% in HFCs' assets under management during FY26-27 [10] - Housing loans as a share of GDP rose to 11% in FY25 from 8% in FY15, driven by demand-side measures [10]