Kota-based test preparation company Resonance Eduventures is preparing for a fresh growth phase after completing the bulk of its long-running debt resolution exercise, the top executive of the firm told Mint.
Founder Ram Kishan Verma said the company is now betting on a recovery in offline coaching demand, student enrolments and brand rebuilding.
“The company is now in a much better position operationally. Most of the work on the settlement side has been completed and we are closing the remaining part as well,” Verma told Mint, in an interview.
Mint was the first to report in April that KKR-backed Resonance was nearing an asset reconstruction company (ARC)-led debt resolution that could see lenders take nearly an 80% haircut on principal claims after years of financial stress.
India's test preparation market size was valued at $11.60 billion in 2025, growing at a CAGR of 8.7% during the forecast period 2026-2030, according to a report by research firm Technavio.
Resonance, which was a sector leader before pandemic, was disrupted by digital hyper-funded peers and faced high poaching pushing it into a debt trap.
Resolution milestone
Over 90% of lenders have already sold their exposure as part of the restructuring exercise, according to Abhijit Shrivastava, co-founder and managing partner at Azalea Capital Partners Llp, the banker for the mandate.
“The ARC involved is ACRE (Assets Care and Reconstruction Enterprise Ltd). Except for Bank of India’s exposure, which is less than 10%, almost everything else has been settled,” Shrivastava said.
The transaction involved multiple lenders, including InCred and L&T Finance, selling their exposure to the ARC.
Separately, certain non-convertible debentures (NCDs) were acquired through an associate entity linked to its southern subsidiary Base Education Services as part of a discounted settlement arrangement for select lenders, he added.
“L&T fund, DSP Mutual Fund and Bank of India Mutual Fund—the NCDs have been bought by Base Education,” he added.
“Currently, around 91–92% of the debt resolution process is complete. Pending lenders have also verbally aligned, though formal approval is still pending. We expect closure in May,” Shrivastava said, adding that the ARC has already submitted a binding bid for the remaining exposure as well.
Once completed, the ARC is expected to restructure the remaining liabilities and enable gradual repayment over time.
From boom to bust
Resonance emerged as one of India’s best-known IIT-JEE and medical entrance coaching brands during the 2000s and early 2010s. But it later came under pressure amid mounting debt, aggressive competition from edtech firms, rising faculty poaching and disruption caused by the pandemic.
The company had earlier borrowed heavily during its expansion phase. Mint had previously reported that KKR extended a structured financing package of around ₹670 crore to Resonance in 2016.
While a portion of the debt was repaid over the years, principal outstanding was estimated at around ₹580 crore, while total claims—including accrued interest and penalties—were estimated at ₹1,700-1,800 crore, Mint had reported.
Offline resurgence
Despite the financial stress, Resonance says its core academic operations remained stable.
“This business fundamentally operates on operating leverage,” Shrivastava said. “As student intake improves, profitability improves sharply because costs do not increase proportionately.”
He added that Resonance already possesses significant academic infrastructure, especially in Kota, reducing the need for fresh capital expenditure.
“The campuses and facilities are already in place. There is very little additional infrastructure spending required,” he said.
Verma said the company’s immediate focus will remain firmly on strengthening its traditional offline coaching business, particularly in IIT-JEE preparation.
“Resonance has always been very strong in offline coaching. Our priority now is to strengthen our existing products and rebuild around what we were already doing successfully,” he said.
The company also plans to increase investments in marketing and faculty recruitment after years of constrained spending.
According to Shrivastava, the debt overhang had previously restricted how the company could deploy capital, forcing Resonance to sharply reduce advertising expenditure even as competitors continued aggressive nationwide campaigns.
The company is also looking beyond Kota for growth.
“Players from Hyderabad and Bengaluru have become strong competitors to Kota-based institutes. Resonance already has a meaningful presence in these regions, which creates additional growth opportunities,” Shrivastava said.
Verma added that while the company maintains some online course offerings, offline education will remain the core strategic focus.
Financial snapshot
Resonance’s financial performance has remained volatile in recent years. According to market intelligence platform Tracxn, the company reported revenue of ₹164.9 crore in FY25, marginally higher than ₹158.1 crore in FY21. It returned to a profit of ₹8.5 crore in FY25 after reporting a ₹2.2 crore loss in FY24.
Its southern subsidiary, Base Educational Services, reported stronger growth, with revenue rising from ₹48.2 crore in FY21 to ₹80.9 crore in FY25, while remaining profitable.
Verma said the company plans to leverage its assets to raise funds for future investments. While it does not intend to raise equity over the next 18 months, he added that it remains open to external funding, provided the terms and valuation are favourable.