Edelweiss Financial Services has completed the transaction under which funds affiliated to global investment firm Carlyle Group have acquired a strategic majority stake in the former’s housing finance arm, Nido Home Finance. Carlyle has invested over Rs 2,000 crore, or about $215 million, in Nido.
The investment takes place through a combination of primary capital infusion and secondary purchase. The primary capital infusion is of approximately Rs 1,450 crore, of which around Rs 725 crore has been received and the balance will come within 18 months.
Nido’s net worth is set to nearly triple to approximately Rs 2,300 crore upon receipt of the entire primary capital.
The secondary purchase of a 45% stake from Edelweiss for approximately Rs 600 crore is complete. “Edelweiss will hold approximately 26% of Nido on a fully diluted basis at the end of 18 months and is to receive a share of the upside, subject to Carlyle realising returns above a specified threshold,” a release said.
Nido offers home loan solutions across the affordable housing and mid-ticket market segments and manages assets under management of Rs 4,900 crore as on June 30. “The infusion of primary equity is expected to strengthen Nido’s financial foundation and position it to serve the underserved affordable and mid-ticket housing segments more effectively across rural, semi-urban and emerging markets,” the release said.
Carlyle brings the strength of a reputed global investor with a strong India presence, a proven track record in financial services that include YES Bank, SBI Card and SBI Life, and a demonstrated ability to create long-term value, with its strategic and operational expertise supporting Nido’s next phase of growth, it said.