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Cerestra to buy assets of K-12 school chain Jain Group

Cerestra Advisors Ltd, the real estate private equity arm of Religare Enterprises Ltd, is acquiring the realty portfolio that houses K-12 schools of Bengaluru-based Jain Group of Institutions.

The Times of India, which reported the development, said Cerestra will acquire a 74 per cent stake in the real estate assets of 12 schools promoted by Chenraj Jain's Arka Eduserve, a wholly owned subsidiary of Jain Group, for Rs 240 crore ($35 million).

Cerestra will initially acquire the assets of six institutions in Karnataka, Maharashtra and Madhya Pradesh, and another six beginning June, the report said, citing Jain.

An email to a spokesperson for Jain Group seeking comment didn’t elicit any response till the time of filing this article.

VCCircle had first reported that Religare was setting up a real estate-focused PE arm that will pool in assets for listing them eventually. The firm last year came out with a concrete plan to raise a Rs 1,000 crore fund to invest in education infrastructure across the country.

The fund’s aim is to buy properties on which educational institutions are running and then lease them back to the same firm. In effect, the fund would pick up a stake in assets such as properties on which schools and colleges run.

Such deals allow firms owning the property to monetise their assets while creating an investment opportunity for investors of the fund, who cannot buy the property themselves given the big ticket size.

The pool of assets is intended to be listed under a real estate investment trust, an investment product for raising long-term capital for realty projects.

VCCircle had first reported that Cerestra was looking at a deal to acquire a bunch of realty assets associated with academic institutions run by Zee Group across a few locations.

Zee, or Essel Group, better known for its TV broadcasting business, also runs one of India's largest chains of schools through its public listed arm Zee Learn Ltd. This firm operates the country's largest pre-school chain under the brand Kidzee (1,350 centres) and the second-largest K12 school chain under Mount Litera (87) besides 31 vocational training institutes under Zee Institute of Creative Art and one centre under Zee Institute of Media Arts.

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