KKR & Co-backed Kota-based test preparation company Resonance Eduventures Ltd. is nearing an asset reconstruction company (ARC)-led debt resolution that may see lenders taking about 80% haircut on principal claims, according to two people aware of the matter.
“Only one ARC has bid for the debt and the deal is nearing completion where it will acquire a majority of the debt. Though the final negotiations on the terms of the deal will decide closure timelines,” said the first person cited above.
The proposed transaction comes amid stress in India’s once-booming offline coaching sector. Following the covid disruption, Kota’s coaching ecosystem experienced a prolonged period of closures and uncertainty. While legacy players such as Resonance attempted to adapt through online classes, competition intensified from new-age edtech entrants and heavily funded incumbents, even as faculty poaching and rising marketing spends made survival tougher.
Resonance's debt sale process involved two Swiss challenge advertisements, the person said, but no competing bidder emerged during the challenge period, leading to its expiry. In a Swiss challenge, third parties are invited to submit counter-bids against an original offer. The mandate for the transaction is being handled by Azalea Capital Advisors, according to the people cited above.
The proposed transaction follows years of recovery efforts by lenders and legal proceedings. During the mid-2010s, KKR & Co. Inc. was an active player in India’s fast-growing private credit market, extending structured loans to multiple mid-sized companies. That strategy later came under strain after the Infrastructure Leasing & Financial Services (IL&FS) crisis exposed risks in leveraged borrowers, with Resonance emerging as one of the stressed exposures.
In 2016, KKR extended a structured financing package of about ₹670 crore to Resonance, with a large portion used to buy out earlier investors and the rest earmarked for expansion and debt repayment.
“The company repaid around ₹160-170 crore of debt in the early years after the KKR transaction, along with some interest servicing,” one of the sources said. “The debt burden, however, became difficult to service after the pandemic disrupted physical coaching operations and Kota’s student ecosystem came under pressure.”
Resonance subsequently defaulted, with principal outstanding at around ₹580 crore when the account turned stressed. “With accrued interest and penal charges over multiple years, total claims are estimated to be closer to ₹1,700-1,800 crore,” the second person said.
Over the years, the lender pool has evolved and now includes InCred Finance, which holds a large exposure after the KKR merger in 2022, Bank of India Mutual Fund, DSP Mutual Fund, and L&T Finance, according to the people.
Queries sent to Resonance, Azalea Capital Advisors, InCred Finance, BOI Mutual Fund, and DSP Mutual Fund did not elicit a response at the time of publishing.
Legal attempts fall flat
Lenders had attempted recovery through proceedings before the National Company Law Tribunal's Jaipur bench, seeking to establish claims over operating entities within the group. At least three insolvency-related petitions and connected interlocutory applications filed by InCred Financial Services Ltd. against Resonance Eduventures before the bench have since been disposed of, according to case records on its website. The latest case was disposed of on 10 February 2026.
“Some of the NCLT proceedings were dismissed after lenders’ attempt to treat key operating entities as co-obligors did not succeed,” said the first person cited above.
Resonance, founded by educator R.K. Verma, was among the best-known names in India’s entrance exam coaching market through the 2000s and early 2010s, building a strong franchise in IIT-JEE and medical entrance preparation from its Kota base.
Despite the debt overhang, Resonance’s southern subsidiary, BASE Educational Services, remains Ebitda positive, while the Kota business has returned to marginal operating profitability after cost rationalization.
Resonance Eduventures’ financial performance has remained volatile over the past five years, with revenue largely remaining flat, according to market intelligence platform Tracxn.
In FY25, it clocked ₹164.9 crore, slightly higher than ₹158.1 crore in FY21. It swung back to profit of ₹8.5 crore profit in FY25, from a ₹2.2 crore loss in FY24. In FY21, the firm logged a profit of ₹16.4 crore.
Meanwhile, Base Educational Services has delivered steady growth, with revenue rising from ₹48.2 crore in FY21 to ₹80.9 crore in FY25, while net profit remained flat at ₹12.3 crore.
“The coaching model carries high operating leverage, which could lift margins on incremental enrolments. The company also holds two Kota buildings, one of which has been leased to another test-prep firm,” said one of the people cited above.
Any turnaround is expected to depend significantly on founder Verma, according to the first person.
In India’s coaching industry, student enrolments are often linked to the reputation of star faculty, making academic continuity a key factor in recovery efforts. Earlier lender attempts to install outside professional management did not succeed operationally, the person added.
“From a legal and restructuring standpoint, the ongoing stress in legacy coaching platforms such as Resonance Eduventures Ltd. is less a cyclical downturn and more a structural reset of the sector,” said Ketan Mukhija, Partner and Co Head PE & VC, Kochhar & Co. “The traditional high fixed-cost, offline model has been fundamentally disrupted by digital and hybrid formats, resulting in sustained cash flow pressures, elevated leverage, and enforcement and resolution processes playing out over time.”
For ARCs, the play is not about reviving the past but unlocking what still endures. "Even in distress, such businesses retain core value in brand recall, academic content, and exposure to structurally resilient demand for test-prep. That said, any credible turnaround hinges on deep deleveraging and a decisive pivot to an asset-light, hybrid model without which legacy liabilities are likely to continue weighing on long-term viability, Mukhija said.