Private equity interest in India's bustling education sector only continues to grow. And this time, Kota-based Resonance Eduventures Pvt Ltd, a test preparation company offering coaching for IIT-JEE and other engineering entrance exams, is raising Rs 100 crore ($22 million) from CLSA Capital Partners, two persons with direct knowledge of the development told VCCircle. CLSA Capital Partners, an Asian independent brokerage and investment group with $2.7 billion in funds under management, is said to be leading the negotiations. The asset management firm is investing Rs 100 crore for up to 12 per cent stake in the company, thereby valuing the firm at a little over Rs 850 crore. The deal which attracted the interest of about 10-12 players, fetched a significant premium to its publicly listed peer, Career Point Infosystems Ltd. Career Point, which has a market capitalisation of Rs 603 crore, is trading 15.4x its trailing PBT for FY11. According to VCCedge, the financial research platform of VCCircle, Resonance Eduventures had PBT of Rs 20 crore for the year ended March, 2010. This means Resonance is being valued over 40x its one-year-old PBT. Its latest financial numbers are not available yet. Resonance apparently commanded a higher valuation multiple in spite of having comparatively lower net profit margin (comparing Resonance's FY10 with Career Point's FY11 numbers).
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