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Gaja Capital-backed CL Educate’s IPO covered 36% on first day


The initial public offering of education services company CL Educate Ltd, which is backed by private equity firm Gaja Capital, crossed the one-third mark on the first day of the issue on Monday.

The offering of 3.33 million shares, excluding anchor allotment, received bids for nearly 1.22 million shares, or 36% of the total, stock-exchange data showed.

Institutional investors led the bidding as their quota was fully covered. The retail investors’ portion was covered about 14% while the quota for non-institutional investors comprising corporate bodies and wealthy individuals was subscribed 0.03%.

New Delhi-based CL Educate is the first education services company to float an IPO for five years, after MT Educare Ltd in March 2012.

On Friday, CL Educate had raised Rs 71.68 crore ($10.95 million) by selling shares to anchor investors.

The education services company, best known for its test prep brand Career Launcher, allotted nearly 1.43 million shares to nine institutional investors at the upper end of the Rs 500-502 price band. The anchor investors included DSP Blackrock India and Singapore-based Flowering Tree Investment Management.

CL Educate is seeking a valuation of Rs 708.84 crore ($107.11 million) through its IPO. Gaja Capital, the company’s promoter, promoter group individuals and institutional shareholders will dilute their stakes.

CL Educate’s Rs 238.95 crore IPO comprises a fresh issue of 2.18 million shares and an offer for sale of nearly 2.58 million shares. It will see a dilution of a 33.61% stake on a post-offer basis.

The company plans to use a tad more than Rs 50 crore to meet working capital requirements for itself as well as its subsidiaries GK Publications Pvt Ltd and Kestone Integrated Marketing Services Pvt Ltd.

It will use about Rs 20 crore to pay in advance a debt of its subsidiary Career Launcher Infrastructure Private Ltd. Besides, it will earmark about Rs 25 crore for acquisitions and strategic initiatives as well as for general corporate purposes.

CL Educate had, in September 2014, sought a valuation of $130-140 million in a proposed IPO, according to VCCircle estimates at the time. But it shelved its IPO plans in April 2015.

The company filed its draft red herring prospectus again with the capital markets regulator Securities and Exchange Board of India in March 2016. It received regulatory clearance in June last year.

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Gaja Capital is a private equity firm with $18.6 million assets under management. It provides growth stage capital for acquisitions, buy-outs, turnarounds and pre-IPO (Initial Public Offer) transactions to companies operating in India. The firm seeks to invest in education, financial services, online media, retail, media sectors. The company was founded in 2004 and is based in Mumbai, Maharashtra.


CL Educate Ltd. (formerly known as Career Launcher India Ltd.) is an education and test preparation institute. It provides education service in the domain of test preparation, K-12 education, vocational training, aptitude test, engineering, medical, law and other competitive exams preparation and coaching across learners of multiple age-groups. The firm also operates play school, provides online educational services and test preparation materials. The company was incorporated in 1996 and is based in New Delhi, India.

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