Carlyle, the largest global private equity firm, will acquire a majority strategic stake in Nido Home Finance, the home finance arm of Edelweiss Financial Services, through an investment of Rs 2.1 billion, marking one of the largest deals in India’s affordable home finance space in recent years.

Under the transaction, Carlyle Asia Partners-affiliated investment funds will pick up a 45% stake in Nido from Edelweiss through a secondary purchase and will simultaneously infuse fresh primary equity of Rs 1,500 crore into the company. The deal will see Carlyle become the majority shareholder, while Edelweiss will continue to hold a significant minority stake in the housing finance business.

Established in 2010, Nido Home Finance is among the leading home finance companies in India focusing on the affordable and mass market segments. The company has a wide national footprint, operating in over 800 talukas, with a strong presence in rural and semi-urban markets. As of now, Nido manages assets under management (AUM) of around ₹4,804 crore and has built a franchise focused on first-time home buyers and self-employed borrowers who remain under-penetrated by traditional lenders.

The purpose of the transaction is to strengthen Nido’s balance sheet and accelerate its next phase of growth at a time when India’s housing finance sector is experiencing strong structural demand. Increasing affordability, sustained policy support for housing and deepening formal credit in smaller cities have created a long-term growth track for lenders focused on the affordable segment.

For Edelweiss, the partnership with Carlyle aligns with its stated strategy of unlocking value in its businesses while onboarding long-term strategic partners. The capital infusion is expected to support faster loan book expansion, technology investments and deeper penetration into underserved geographies.

“This investment is a key milestone for Nido and brings a high-quality, long-term partner to accelerate its growth path,” said Edelweiss President and CEO Rashesh Shah. He added that Nido is well positioned to benefit from strong demand for housing finance, supported by improved access to formal credit and rising home ownership aspirations.

Carlyle, which has been investing in India for more than two decades, said the deal reflects its belief in the country’s housing finance opportunity. The global investment firm has previous experience in the segment through investments in companies such as PNB Housing Finance and HDFC. As part of the transaction, Aditya Puri, senior advisor at Carlyle in Asia and former CEO of HDFC Bank, will also participate as an investor, underscoring the strategic importance of the partnership.

“We are delighted to partner with Edelweiss to support Nido’s expansion, particularly in rural and semi-urban markets where housing remains a critical national priority,” said Sunil Kaul, Partner and Head of Financial Services Asia at Carlyle. He noted that Carlyle would draw on its operational expertise to help strengthen governance and risk management frameworks at Nido to ensure long-term sustainable growth.

The transaction is subject to regulatory approvals from the Reserve Bank of India, National Housing Bank, Competition Commission of India and other customary conditions. Once completed, the deal is expected to further intensify competition in India’s affordable housing finance space as well-capitalized lenders scramble to tap into the next wave of home ownership growth.