Providence, NEA plan to buy stake in FIITJEE

Global private equity majors NEA and Providence Equity Partners are understood to have evinced keen interest to pick up stake in FIITJEE, a pan-India test preparation company for engineering and medical entrance examinations. According to investment bankers close the deal, FIITJEE is looking to raise Rs 200 crore from its third round of private equity funding. Bankers in the know said that this fresh round of fund raising comes close on the heels of a round in which QInvest, an investment bank based in Qatar picked up stake in the company. FIITJEE had during July 2009 raised Rs 100 crore from Matrix Partners.

Dinesh Kumar Goel, chairman, FIITJEE did confirm that they are in the market to raise funds for setting up new centres in India. Bankers close to the deal also indicate that FIITJEE, which reported a PAT of close to Rs 42 crore may be valued at around Rs 2500 crore for the fund raising.

FIITJEE, a which has been around for nearly two decades, started out to train students for competitive entrance examinations for IITs, has now diversified into coaching for Olympiads, SAT, National Talent Search Examination, State Engineering exams besides few others. According FIITJEE, it has has over 30,000 students enrolled in its coaching programmes across 50 centers and 35 integrated school programmes in India and the Middle East.

NEA, the global private equity fund with $11 billion in invested capital, which is being managed by ex-ICICI Venture fund honcho Bala Deshpande in India, has been getting pretty aggresive in the Indian market and was close to clinching a $50 million investment deal with Bangalore-based Tutorvista, before Pearson picked up majority stake. Deshpande is understood to have led two investments at inTarvo ( a reverse logistics service provider) and Nova Medical Centre (a day care surgical chain).

Providence, which has $23 billion of capital under management, too has been in the thick of deals in the Indian market having invested in Indus Towers, Idea Cellular. Providence has also invested in Study Group, a provider of university access and preparation programs and English language courses to international students, as well as a provider of vocational courses mainly to Australian students.

The company has a presence in Australia, New Zealand, the U.K. and the U.S. Providence is currently investing from its sixth fund, Providence Equity Partners VI, which closed on $12 billion in 2007.