MT Educare, a Mumbai-based K-12 tutoring and test preparation firm, opened at 7.8 per cent premium on its stock market debut and touched a high of nearly 13 per cent in early trade. The company is backed by India-focused private equity firm Helix Investments, which has made 2.5x returns in the part-exit from its four-and-a-half-year-old investment.

Shares of MT Educare closed at Rs 90.35 a unit on the BSE on Thursday, the upper circuit limit of the. The stock listed at Rs 86.05 per share in the morning – premium to its issue price of Rs 80. At the current share price of Rs 90.35, the company has a market capitalisation of Rs 357 crore.

MT Educare raised Rs 99 crore through its initial public offering last month, which was oversubscribed 4.8 times. Nearly two-thirds of the issue involved a secondary sale, with Helix selling most of its stake for Rs 64 crore. The remaining issue was a primary issue for Rs 35 crore.

Before the IPO, Helix owned 28.6 per cent stake in MT Educare, acquired when it invested Rs 32.8 crore ($8 million) in 2007. The investment was initially made through compulsorily convertible preference shares, which were converted in March 2009. Of the 10.07 million shares, Helix sold 8 million in the IPO and currently holds 5.25 per cent stake in the company.

Other portfolio companies of Helix include power electronics player Hi-Rel Electronics, calorie-counted meal delivery service Calorie Care, medical transcription outsourcing provider OSi and e-learning solutions firm LearningMate. Helix, which eyes deals between $5 million and $15 million, is a $100 million fund sponsored by Culbro LLC (the private equity investment vehicle of the Cullman family of New York) and Bloomingdale Properties.

From the issue proceeds, MT Educare plans to use Rs 20 crore for land acquisition and construction of its pre-university college campus at Mangalore in Karnataka. Another Rs 5 crore is expected to be used for opening new coaching centres in 20 locations.

MT Educare offers coaching for Std IX-Std XII students, besides engineering and medical entrance tests, as well as CA CPT, CS, CWA and professional CA (IPCC & Final) exams. It has also diversified into pre-school and day-care services through Global Champs. The company is headed by chairman and managing director Mahesh R. Shetty, who is the biggest shareholder in the firm with 42.88 per cent stake.

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