Exclusive: Crisis Deepens for Resonance and BASE Edu as Lenders Manage to Freeze Bank Account
•February 6, 2026
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Companies Mentioned
PhysicsWallah
Unacademy
Why It Matters
The account freeze highlights the fragility of legacy offline coaching models and signals heightened risk for lenders tied to distressed education firms. It also accelerates market consolidation toward digitally‑native competitors.
Key Takeaways
- •Lenders froze Resonance Group's expense accounts due to debt defaults.
- •BASE holds enough cash for a year despite account freeze.
- •Offline coaching enrollment fell sharply, leaving only one operational centre.
- •Real estate investments drained Resonance's cash flow, prompting defaults.
- •Market now dominated by PhysicsWallah and Allen after sector contraction.
Pulse Analysis
The recent court‑ordered freeze on Resonance Group’s expense accounts underscores a broader shift in India’s test‑preparation landscape. While the company raised roughly Rs 800 crore in bank and NBFC debt to fund aggressive expansion, a sizable portion was diverted into real‑estate projects that never generated the expected returns. Coupled with a post‑pandemic collapse in offline enrolments, the debt burden became unsustainable, prompting lenders to act decisively to protect their capital. This episode illustrates how legacy education operators, once reliant on brick‑and‑mortar hubs, are vulnerable when they fail to adapt to digital disruption and prudent capital allocation.
The fallout reverberates across the offline coaching sector, now narrowed to a duopoly of PhysicsWallah and Allen. High faculty costs and intense price wars have compressed margins, forcing weaker players like Resonance to shutter centres and confront liquidity constraints despite nominal cash balances. BASE’s ability to fund operations for the next year offers a temporary buffer, but the broader market dynamics suggest that only firms with scalable digital platforms and disciplined cost structures will thrive. Investors and lenders are consequently re‑evaluating exposure to traditional coaching chains, favoring models that can leverage technology to lower overhead and reach students beyond geographic constraints.
Looking ahead, the resolution of Resonance’s legal impasse will hinge on restructuring negotiations that balance creditor recoveries with the company’s operational viability. Potential pathways include asset sales, debt‑to‑equity swaps, or strategic partnerships with digital edtech players seeking offline footholds. For stakeholders, the key lesson is the importance of aligning growth financing with core business fundamentals, especially in sectors undergoing rapid technological transition. As the offline segment contracts, the industry is likely to see further consolidation, with surviving entities either embracing hybrid delivery models or exiting the market altogether.
Exclusive: Crisis deepens for Resonance and BASE Edu as lenders manage to freeze bank account
Kota-based coaching major Resonance Group and its subsidiaries, including BASE Educational Services Pvt Ltd, have faced a crisis after their expense accounts were frozen following the company’s failure to repay debt to multiple lenders, including banks and NBFCs.
In an internal communication dated February 3, 2026, seen by Entrackr, the company informed employees that Resonance has been negotiating a settlement with its lenders for the past few years. As part of efforts by lenders to secure repayments, they approached the court and obtained a stay on the expense accounts of the Resonance Group, including BASE.
“As a result, BESPL may not be able to process and disburse salary and other expenses till 11th February 2026,” the note further said. Meanwhile, its legal advisors are working to vacate the stay and expect relief by that date. As per the note, the management also sought to distance BASE from the crisis, stating that staff are undergoing the ordeal “for no fault”.
Importantly, the note said that BASE has sufficient funds in its bank accounts to cover expenses for the next year, indicating that the issue is not one of liquidity but of restricted access to funds due to the court order. BASE is a subsidiary of Resonance, which the group acquired in 2015.
Resonance Group, once a prominent name in offline test preparation, has faced mounting financial stress in recent years amid declining enrolments, rising competition from digital-first edtech platforms, and a broader slowdown in the coaching sector.
According to sources, Resonance managed to raise nearly Rs 800 crore in debt from a mix of banks and non-banking financial companies (NBFCs) over the years to fund expansion and working capital requirements. The company had also acquired Accelerating Education & Development Private Limited (AEDPL) as part of its growth strategy.
However, sources said a significant portion of the borrowed funds was deployed in real estate investments, which strained cash flows and impacted core business operations. Missed interest payments and delays in loan repayments eventually triggered lender action.
Financially, Resonance Group reported Rs 160 crore in consolidated revenue with a loss of Rs 2.2 crore in FY24. BASE, a subsidiary, posted Rs 67.5 crore in revenue and a profit of Rs 11.5 crore during the same period. Both companies are yet to file their financial statements for FY25.
Sources assert that most of the Resonance offline coaching centres were shut during and after Covid-inducued pandemic. Kota centre is the only operational centre which has about 1,000 enrolments, said sources. At its peak (8-10 years ago), the firm had more than 80,000 annual enrollments.
With uncertainty surrounding BASE, the offline test preparation market has effectively narrowed to two major players: PhysicsWallah and Allen. Other large operators are facing their own challenges. Aakash has been under pressure amid ownership-related issues and senior-level exits, while Unacademy has been exploring a sale of its offline business to coaching groups such as Sri Chaitanya.
In this environment, the focus has shifted to the sustainability of offline coaching economics. High faculty costs and aggressive price competition have compressed margins across the sector. However, for scaled players like Allen and PhysicsWallah, margins could improve over time as faculty salaries normalise and tuition fees adjust upward.
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