Carlyle-led investors take control of Edelweiss’ Nido for over ₹2,000 crore

Edelweiss Financial Services on Friday said it has completed the sale of a strategic stake in Nido Home Finance to a Carlyle-affiliated investment entity and an investment vehicle of former HDFC Bank chief Aditya Puri and his family, marking the exit of Nido as an Edelweiss subsidiary.

The transaction, first announced in February, was consummated on September 25 after receiving the required regulatory and statutory approvals, Edelweiss said in an exchange filing.

The buyers have invested more than ₹2,000 crore in Nido through a combination of a secondary stake purchase and primary capital infusion. The Carlyle affiliate, CA Sardo Investments, and Salisbury Investments Private Limited have acquired 45% of Nido from Edelweiss Financial Services, Edelweiss Rural & Corporate Services and Edel Finance Company.

Carlyle-led investors now hold 58.26%

The sellers have transferred 45% of Nido’s paid-up equity capital for an aggregate consideration of ₹580.68 crore. Separately, Nido has issued 2.59 crore equity shares and 5.18 crore warrants to the buyers for ₹1,446.14 crore.

Following the transaction, the buyers now hold 58.26% of Nido. Their holding is set to rise to 72.70% within 18 months on a fully diluted basis after conversion of the warrants.

As a result, Nido has ceased to be a subsidiary of Edelweiss. The sellers currently retain a combined 38.91% stake, which will come down to 25.46% on a fully diluted basis.

Focus on affordable housing

Nido, which was established in 2010, operates in the affordable and mass-market housing finance segments. Its platform has an AUM of around ₹4,900 crore, with about ₹2,000 crore deployed in affordable housing, according to Edelweiss’ transaction presentation.

The company has 68 branches across 11 states and three Union Territories, with 68% of its loan accounts located in non-metro markets. It also serves customers across more than 800 talukas.

Rashesh Shah, chairman and MD of Edelweiss, had said when the transaction was announced that Carlyle’s investment would bring in a “high-quality, long-term partner” to accelerate Nido’s growth. He also highlighted the opportunity in affordable housing, supported by rising affordability and deeper access to formal credit.

Carlyle’s Sunil Kaul had said the firm was looking to use its financial-services and housing-finance experience to help Nido scale in rural and semi-urban markets while strengthening its governance and risk-management frameworks.

Edelweiss’ transaction presentation said the stake-sale proceeds would be used to reduce debt and strengthen its balance sheet. It also said the group would retain an economic interest in Nido, including a share of the upside if Carlyle realises returns above a specified threshold.