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Milestone Religare Investment Advisors has made an investment of Rs 25 crore (`$5 million) in test preparation firm IMS Learning Resources Pvt Ltd. The investment has been made from India Build-Out Fund 1, a Rs 600 crore private equity fund backed by Religare Enterprises and Milestone Capital.

The deal follows two other private equity investments in test preparation firms earlier this quarter. Matrix Partners India made a Rs 100 crore investment in FIITJEE Ltd, which provides training for

engineering entrance exams. This was followed by Franklin Templeton India's private equity arm's investment of Rs 50 crore ($10.35 million) in test preparation firm Career Point Infosystems Ltd. Both of these companies are looking to expand into formal education post funding.

IMS has over 140 centers across 90 cities in India, and provides test preparation services for entrance exams of various management institutes in India. It also provides coaching for international standardized tests such as the GMAT, GRE, and SAT. The firm has also recently forayed into formal education with opening of Praxis Business School in Kolkata.

"Given that the education sector is on a positive growth path, we feel that IMS can play a major role in shaping up the same and take advantage of this tremendous opportunity," said Rajesh Singhal, Managing Partner at Milestone Religare Investment Advisors, which focuses on education & healthcare sectors.

IMS also provides test preparation for engineering and law, with a presence also in skills development. Equirus Capital was the advisor to IMS for the transaction.

India's education sector has continued to attract investments this year as PE & VC players look for their share in large non-cyclical opportunity. The private spending on education is increasing by 14% CAGR and is expected to reach $80 billion by 2012, says an IDFC-SSKI report.

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