Edelweiss Shares Jump 9% on Doubled Profit, Carlyle's ₹2,100 Cr Investment

Introduction

Shares of Edelweiss Financial Services surged nearly 9% on February 10, 2026, driven by a dual announcement of strong third-quarter earnings and a significant strategic investment from US-based asset manager Carlyle Group. The company's consolidated net profit more than doubled year-on-year, while Carlyle committed to investing ₹2,100 crore for a majority stake in its housing finance arm, Nido Home Finance. This combination of robust operational performance and a major capital infusion signals a pivotal moment for the financial services firm, reinforcing investor confidence and setting the stage for future growth.

Carlyle's Strategic Investment in Nido Home Finance

The cornerstone of the day's announcements was the strategic partnership with Carlyle. The private equity firm will invest ₹2,100 crore in Nido Home Finance. The transaction is structured in two parts: a primary equity infusion of ₹1,500 crore into Nido to fuel its expansion, and a secondary purchase of a 45% stake from the parent company, Edelweiss Financial Services. Upon completion of the deal, which is subject to regulatory approvals from the RBI, National Housing Bank, and the Competition Commission of India, investment funds affiliated with Carlyle Asia Partners are expected to hold a majority stake of approximately 73% in Nido. This move positions Carlyle as a key player in India's rapidly growing affordable housing finance market.

Significance of the Partnership

This partnership is designed to unlock value for Edelweiss while providing Nido with the necessary capital and operational expertise for its next growth phase. The investment specifically targets the affordable housing segment in rural and semi-urban markets, an area of high priority for the Indian government. Rashesh Shah, Chairman & MD of Edelweiss, described the investment as a key milestone that brings in a high-quality, long-term partner. For Carlyle, the deal reflects its continued commitment to India's financial services sector. Sunil Kaul, Partner and Asia Financial Services Sector Lead at Carlyle, emphasized the firm's conviction in the growth potential of the housing finance industry and its intent to help Nido scale its operations. Notably, Aditya Puri, former CEO and Managing Director of HDFC Bank and a senior advisor to Carlyle, will also participate as an investor, adding significant weight to the venture.

Stellar Q3 Financial Performance

Complementing the strategic investment news, Edelweiss reported an exceptional financial performance for the third quarter of the financial year 2025-26. The company's consolidated net profit saw a staggering 112% year-on-year jump, rising to ₹264 crore from ₹124.37 crore in the same period last year. Furthermore, revenue from operations for the quarter surged by 132.1% to ₹4,404.43 crore, compared to ₹1,897.67 crore in Q3 FY25. This strong bottom-line growth underscores the health of the company's diverse business verticals, even as interest income saw a minor dip of 3.4% YoY.

Performance Across Business Segments

The company's growth was broad-based across its key business units. The Alternative Asset Management business saw its fee-paying assets under management (FPAUM) increase by 33% year-on-year to ₹41,920 crore. The Mutual Fund division also demonstrated strong momentum, with its equity AUM growing by 33% to ₹83,000 crore and its SIP book crossing the ₹500 crore mark, a 55% increase from the previous year. The Asset Reconstruction business recorded recoveries of ₹842 crore during the quarter. Nido Home Finance itself reported a 21% YoY growth in its Assets Under Management (AUM), which stood at ₹4,804 crore as of December 2025, with loan disbursements rising 36% YoY to ₹559 crore.

Key Financial Metrics Summary

Market Reaction and Stock Performance

Investors reacted positively to the announcements, sending the company's stock soaring. On February 10, shares of Edelweiss Financial Services rallied as much as 10.5% to a day's high of ₹123 on the BSE. By mid-afternoon, the stock was trading around 8% higher at ₹120.4 per share. The strong performance on the day contributed to a 10% rise in the stock's value so far in 2026, reflecting growing market optimism about the company's strategic direction and financial health.

Future Outlook for Edelweiss

Looking ahead, Edelweiss is focused on several value-unlocking initiatives. The company's Alternative Asset Management arm, EAAA India Alternatives Ltd., has already filed its Draft Red Herring Prospectus (DRHP) with regulators in January 2026, signaling a potential demerger and IPO. Additionally, management has guided that its insurance businesses are on a clear path to achieve breakeven by FY27. The successful infusion of capital into Nido via the Carlyle partnership is a significant step in advancing the objective of creating and unlocking value across its various businesses.

Conclusion

The dual announcement of a landmark investment by Carlyle and a robust doubling of quarterly profit marks a significant positive development for Edelweiss Financial Services. The deal not only provides substantial growth capital for its housing finance subsidiary but also validates the potential of India's affordable housing sector. Combined with strong performance across its asset management and mutual fund businesses, Edelweiss appears well-positioned to strengthen its market standing and deliver enhanced shareholder value, pending the necessary regulatory approvals for the transaction.