The crisis at the Kota-based coaching giant Resonance reached a breaking point on February 6, 2026, as lenders successfully obtained a court order to freeze the group’s expense accounts.
The action follows a multi-year struggle to settle nearly ₹800 crore in debt owed to a mix of banks and non-banking financial companies (NBFCs).
1. Impact on Employees and Subsidiaries
The freeze has immediately paralyzed the company’s ability to handle operational costs.
- Salary Delays: In an internal note dated February 3, 2026, the management informed staff that salaries and other expenses might not be disbursed until at least February 11, 2026, while legal teams work to vacate the stay.
- BASE Educational Services: The freeze has also affected Resonance’s Bengaluru-based subsidiary, BASE Edu. Despite BASE having sufficient internal liquidity to cover a year’s expenses, the court-mandated freeze prevents the company from accessing those funds.
- Management’s Defense: Resonance management has sought to distance its subsidiaries from the crisis, stating that BASE staff are “undergoing the ordeal for no fault of their own.”
2. The Anatomy of the ₹800 Cr Debt
Sources indicate that the financial distress is a combination of aggressive expansion and non-core investments.
- Funding History: The ₹800 crore debt was accumulated over several years to fund growth, including the acquisition of Accelerating Education & Development (AEDPL).
- Real Estate Diversion: A significant portion of the borrowed capital was reportedly diverted into real estate investments. When these assets failed to generate expected returns, the company began missing interest payments, eventually triggering lender action.
3. The Decline of a Kota Giant
Resonance, once a dominant name in the IIT-JEE prep market, has faced a steep decline over the last decade.
- Enrollment Crash: At its peak 8-10 years ago, the firm saw over 80,000 annual enrollments. Today, that number has reportedly dwindled to just 1,000 students at its sole operational center in Kota.
- Competitive Pressure: The company struggled to adapt to the “Covid-induced” shift to digital learning and faced intense competition from digital-first players like PhysicsWallah and legacy rivals like Allen.
4. Shifting Landscape of Offline Coaching
The Resonance crisis highlights the current “sustainability” struggle in the offline coaching sector.
| Status | Company | Current Market Outlook |
| Resonance | Crisis | Bank accounts frozen; seeking settlement with lenders. |
| Aakash | Pressure | Facing internal ownership disputes and senior leadership exits. |
| Unacademy | Pivoting | Reportedly exploring a sale of its offline centers to groups like Sri Chaitanya. |
| Allen & PW | Dominant | Successfully scaling hybrid models with improving margins. |
Conclusion: A Race Against Time
Resonance is currently in a high-stakes negotiation with its lenders. While the company expects legal relief by February 11, the long-term survival of the brand depends on its ability to restructure the massive debt and find a sustainable path forward in a market that has largely moved on.
