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    Business in education   september 2011 Business in education september 2011 Document Transcript

    • Business in Education September 2011INDALYTICSADVISORS BUSINESS IN EDUCATION September 2011 © 2011, Indalytics Advisors Private Limited | Indalytics.com | businessineducation@indalytics.com © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 1
    • Business in Education September 2011About Business in EducationBusiness in Education is a monthly report, which is focused on the supply side of education sector in India. Thereport aimed at helping education services providers with the latest activities in the sector.The report covers the trends, as well as the opportunities in the Indian education sector, which were highlighted inmedia. It is designed for the individuals and organizations, which are in the education business, or are planning toenter it. It is also helpful for various products and services providers to the sector.In order to get free subscription to Business in Education, please mail us at businessineducation@indalytics.com© Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 2
    • Business in Education September 2011Table of ContentsActivities of Major Players .............................................................................................................................................4 Companies are collaborating with government ........................................................................................................4 Institutes are also tying-up with other organizations ...............................................................................................4 Increasing use of ICT .................................................................................................................................................5 Collaboration between foreign and Indian players ...................................................................................................5 Companies going for fundraising and mergers .........................................................................................................5Opportunities in the sector ...........................................................................................................................................7 Opportunities in Public Private Partnerships ............................................................................................................ 7 Collaboration with foreign players ............................................................................................................................7Other Prominent Trends in the Sector ..........................................................................................................................9 B-schools revising their curriculum ...........................................................................................................................9 Government taking steps to improve education level in the country ......................................................................9 Uniformity in K-12 .................................................................................................................................................9 Pre-school education might get formalized ........................................................................................................10 RTE Act expected to bring changes in the system ..............................................................................................10 Changes in education loans .....................................................................................................................................10Companies’ Score Card ................................................................................................................................................11List of Organizations ....................................................................................................................................................13 © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 3
    • Business in Education September 2011Activities of Major Players Institutes are also tying-up with other organizationsCompanies are collaborating with In addition to the government, educationalgovernment institutions are also tying-up with other organizations to help them in their educational ventures.Many major players in the education sector areexploring opportunities to work with thegovernment agencies in partnerships. Manipal Education and Bank of Baroda (BoB) have come up with a unique banking school. The school named the Baroda Manipal School of BankingIn one such move, Sterlite Technologies Limited – (BMSB) has been set up with an investment of INR30provider of connectivity solutions for the power and crore to offer training to future employees of BoBtelecom industries– will be working with Bharat before they start working as probationary officers.Sanchar Nigam Limited (BSNL) to connect 120universities across the country. The school will act as another recruitment mode for the bank, which hires approximately 2,000 officersAs a part of Ministry of Human Resource as well as 2000 clerks every year through theDevelopment (MHRD), ‘National Mission on probationary officers’ exams. The course would haveEducation through Information and Communication a fee of INR3 lakh, and would include a nine monthand Technology (ICT)’ program, Sterlite Technologies in campus training followed by a three month offLimited would lay down the network, which would campus internship at any of the BoB branches. Theconnect 12 universities, and would facilitate high bank will take the job guarantee of the studentsbandwidth data transmission for e-learning and passing out of it and attaining the Postgraduatevideo-based learning. The objective of the program Diploma in Banking and Finance by Manipalis to make every university in the network to University.function as an e-university. The total contract valuedat about INR48 crore. In another instance, Educomp Solution Limited has also formed a joint venture with Sri Kanchi KamakotiAnother company, CORE Projects & Technologies Peetam to setup and manage 100 schools across theLimited has bagged a contract from Gujarat country. The schools will be known as Sri KanchiGovernment to implement Computer Aided Learning Sankara Universal Academy and will come under the(CAL) in 3,236 Primary Schools in the state. Total patronage of Kanchi Sankaracharya Jayendravalue of the project is worth INR124 crore. CORE, Saraswathi. As per the JV, Educomp will take care ofwhich is already present in 645 schools in Gujarat, the setup and management, while the Kanchi Mutthas got similar CAL & ICT contracts for 2,622 schools will provide the land and philosophical learning.in Haryana, 1,250 in Punjab, 947 in Maharashtra, 267in Meghalaya, and 73 schools in Nagaland.© Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 4
    • Business in Education September 2011Increasing use of ICT USM. The concept has emerged to tackle the issues faced by USM in opening a college in Malaysia due to tougher rules and dearth of teachers.One of the most active areas in the education sectoris the ICT, which has witnessed a lot of action in themonth of August. Canadian firm Smart Technologies Companies are exploring foreign markets. Chennaihas come up with its full and multi-touchscreen based Everonn Education Limited is planning tointeractive white boards in India. The full enter foreign countries, including Africa. Thetouchscreen whiteboards, which support integration company, which is expected to achieve 22% of itsof Microsoft, Macintosh and Open source softwares, revenues from international operations in next twocan also be configured to the mobile phones of years, is eyeing Africa, after the Prime Minister’sstudents for exchange of data. Smart technologies US$700 million aid for setting up institutions andhas appointed HCL Infosystems as its distributor in training programs across Africa, announced in MayIndia, and is selling its products through its 250 2011.channel partners in the country. Similarly, there are foreign players, which areAnother firm banking on ICT in education is London- expanding in India. Pearson Education Services isheadquartered global media group Pearson planning to expand its English language tests inEducation Services. The company has launched its Indian cities through partnerships. The company’sVSAT based Engineering and Medical Prep Program, Pearson Test of English (PTE Academic) is a‘EduriteONE’. The service will provide remote computer-based test designed for internationaldelivery of coaching for engineering and medical students, for testing their proficiency in the Englishentrance exams to remote towns and semi-urban language. PTE Academic is already accepted bycenters across India, from its Bengalooru studio. The various overseas government departments andcompany has started the service through one of its education institutions, such as the Harvard Businessschools, Gyansagar International School in Sohagpur, School and Yale University.located in Madhya Pradesh. Companies going for fundraising andCollaboration between foreign and mergersIndian players In order to fuel their expansion plans, companies areMany Indian education companies are collaborating going for fundraising. Educational services providerwith their foreign counterparts to attain synergies. Tree House Education and Accessories Limited,This has resulted in education outsourcing emerged which has 223 pre-schools under its brand nameas a new trend in the sector. University of Science "Tree House" across 33 cities in India, went for anMalaysia (USM) has outsourced the entire process IPO in the month of August 2011. The IPO, which hadof education to KLE Group of Institutions. KLE Group a price band of INR135 — INR153 a share, gothas setup a college on a 10-acre campus in Belgaum, subscribed 1.85 times, and finally opened at a pricewhich will impart medical education exclusively to of INR132.40 on August 26.Malaysian students. The college will run on thecurriculum of 5-year MD course as per USM syllabus.Further, the students will also be selected directly by © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 5
    • Business in Education September 2011The company is planning to use the proceeds for Companies are also taking the path of inorganicexpansion of pre-school business; acquisition of growth and going for mergers. Education contentoffice space; procurement of exclusivity rights to provider Repro India has acquired printing operationprovide educational services; construction of of Macmillan. The company is focusing on contentinfrastructure for educational complexes in creation, aggregation and dissemination in theRajasthan and Gujarat; and repayment of a debt of Indian education sector. The acquisition is expectedINR28.5 crores. Tree House is also backed by PE to add approximately INR250 crore in five years toplayers Matrix Partners and FC Advisors (Mauritius) Repro’s top line.Ltd.Similarly, Everonn Education Limited, is planning toraise debt for investing approximately INR150 croreCAPEX in the present fiscal. The company is expectedto invest the amount in its ‘iSchool’ model. Everonnis planning to increase its revenues by 50% duringthe present fiscal year. © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 6
    • Business in Education September 2011Opportunities in the sector (CEC) is planning to come up with 20 new education specific television channels by February 2012. The channels will be dedicated to education, and cover e-learning by broadcasting audio-visual lectures. ThisOpportunities in Public Private will provide opportunities to media contentPartnerships producers to offer their services to CEC.Increasing focus by the center as well as state Another interesting opportunity has been indicatedgovernments on the educational development has by the government of Rajasthan, which is launchinggenerated opportunities for the players in the an education specific social networking site, on thesector. The government of Madhya Pradesh is line of Facebook. The portal will help students withfloating tenders to invite private players to set up tips and expert comments on subjects such ascomputer labs and other infrastructure in various physics, chemistry and mathematics. Besides this,schools. the portal will have other functionalities of a social networking site, which will help students to open up their individual accounts, add friends, uploadThe government has also announced INR1,300 crore photographs, and connect to others on relatedplan to overhaul primary education in the state. It topics.will be investing INR250 crore to employ teachers toimprove the student-to-teacher ratio from 45:1 to30:1, and INR336 crore for building girls’ hostels in201 backward blocks of the state. Collaboration with foreign playersGovernment of Tamil Nadu, under the Sarva Many Indian higher education institutions areShiksha Abhiyan and the Rastriya Madhyamik looking for collaboration with foreign universities. AsShiksha Abhiyan, is bringing many new changes in the Indian education system is getting globalized,the state education. It will be spending INR1,082.71 many universities and colleges are collaborating withcrore on infrastructure development in schools. The their foreign counterparts for curriculum andgovernment will also be appointing 21,487 teaching student exchange. Collaboration helps Indianand non-teaching staff, and creating posts for 16,549 institutions in enhancing their brand value, as well aspart-time teachers for physical education, painting the quality of the curriculum.and vocational education. The biggest collaboration opportunity that IndianTamil Nadu is also advocating the need of ICT in educational institutions are eying at present is theschools. According to the Chief Minister J. increasing number of universities and educationJayalalitha, schools’ textbooks will be computerized. facility centers in the gulf countries. Places such asFurther, the knowledge will be disseminated through Abu Dhabi, Bahrain, Dubai and Qatar are investingcomputers in classrooms which, in turn will be linked heavily in education. As they are attracting foreignto the main servers at the schools. investment and talent, this has provided Indian educational institutions and service providers, an opportunity to help the gulf countries develop theirIn another ICT initiative by the central government, system.the Consortium for Educational Communication © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 7
    • Business in Education September 2011Australia, on the other hand is losing its status as a While Australia is becoming a less preferredpreferred education destination. A strong Australian destination, 11 US colleges and universities aredollar has resulted in a drop in student visa expected to have partnership programs with India.applications from India. A decrease of 63% has been As a part of US President Barack Obama’s and Indianwitnessed in the number of student visa applications Prime Minister Manmohan Singh’s 21st Centuryfrom India to Australia between July 2010 and June Knowledge Initiative, the 11 US institutions will2011, as compared to the same period in the conduct various activities and will work onprevious year. As present, there are more than 300 prospective partnerships with their Indiancollaborations between Australian and Indian counterparts. The initiative will provide US$10universities for sharing of knowledge and expertise. million in combined funding for facilitation of networking and development of junior faculties among the universities. After the initiative, the Indira Gandhi National Open University (IGNOU) Community College initiative is exploring partnership opportunities with the US Community College system. © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 8
    • Business in Education September 2011Other Prominent Trends in the Government taking steps to improveSector education level in the countryB-schools revising their curriculum The Government of India has taken an initiative toward improving the level of education across the country. Prime Minister Manmohan Singh hasMany major B-schools in India are reviewing their announced of a commission which will be headed bycurriculum and are taking feedback from the an eminent educationist, and will be assisted byrecruiters to alter the subjects. After the global experts from the fields of higher, technical, medical,financial crisis, all major B-schools across the world secondary, elementary, vocational and other sectorshave started giving more emphasis to ethical of education. The commission, which will suggestpractices at workplaces. In India, all the Indian ways to the Government to improve all levels ofInstitute of Management and other major B-Schools education, will also have inputs from the reports ofsuch as SP Jain Institute of Management & the National Knowledge Commission, the YashpalResearch, and Symbiosis Institute of Business Committee and the Valiathan Committee. However,Management have changed, or are in the process of experts feel that the commission should also includechanging their curriculum. B-schools are also laying foreign experts, as the sector is now collaboratingimportance on the industry internship, and are with many foreign bodies due to the globalization ofmaking adequate changes in the curriculum so that education.the students get the opportunity to learn more atwork. Indian School of Business (ISB) is likely toextend the duration of its one-year residential Post Uniformity in K-12Graduate Program in Management (PGPM), byincluding six-month internship. The government is also planning to bring uniformity in the pattern of education till class XII across theBesides their regular programs, B-schools are also country, in order to increase the quality ofrevising the curriculum of their executive education education, primarily at the secondary and higherprograms, to make them more in sync with the secondary levels. The panel, constituted by theindustry requirements. Corporates are now asking government to suggest policy changes for educationfor a quantifiable return on investment on the in the XII five-year plan has advocatedmoney they are spending on their employees’ universalisation of secondary education by 2017.executive education programs. As a result, B-schoolsare now coming up with special curriculum, whichare inclined toward the specific needs of students, The panel has also asked for integration of theand can help them in relating their learning at B- 10+2+3 pattern of education of various states intoschools to their work. ISB has come up with a new one. The panel has stated that variation in patternssystem by creating an organization structure, which at state level is causing hindrance in meeting thefocuses on industry verticals such as manufacturing, goal of providing quality education. Further theoil and gas, and financial services. panel has also suggested making the teaching methods of science and mathematics in schools more job-oriented. It also suggested that the students should have the option to choose their electives at class IX itself, rather than class XI. © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 9
    • Business in Education September 2011 to employ at least one teacher each for science, mathematics, social studies and language subjectsAccording to the XI five-year-plan, a sum of for the three classes. The schools will have toINR269,873 crore was allocated for the ministry of maintain the teacher-student at 1:45. Also, forhuman resource development. Out of this, schools having more than 100 students per class,INR1,84,930 crore (69%) was allocated for the there needs to be a full-time head teacher,department of school education and literacy, and supported by part-time instructors for subjects suchthe remaining for the department of higher as art education, physical education and workeducation. education.Pre-school education might get formalized Changes in education loansGovernment of India is also planning to formalizethe pre-school education system in the country. Education loans are also expected to witness someHowever, the education will be imparted without changes in coming future. Indian Banks Association,the levying the burden of school bags and books on which is working along the lines of the educationchildren. According to the Human Resource loan scheme in the UK, is expected to allowDevelopment Minister, Kapil Sibal, though the extended repayment period of up to 15 years forpreschool education might be formalized, the pre- education loans, against the present 5 — 7 years.school age group (4 – 6 years) will not come under The step is expected to be beneficial for both thethe Right to Education, which means the education banks, as well as the borrowers. Banks are expectedwould not be compulsory. to witness decrease in loan defaults, with the introduction of extended repayment periods. This in turn will also lead to the decrease in provisions,RTE Act expected to bring changes in the system which the banks make for these loans. On the students’ side, it will help those students, who enroll in private colleges, and are not able to get god jobAs many state governments are implementing the placements from their colleges.Right to Education (RTE) Act, schoolteachers mightnow have to work for 45 hours a week, including The new scheme will have a maximum loan limit ofpreparation, as specified in the act. Schools now will INR10 lakh for studies in India and INR20 lakh foralso have to rework on the number of hours and studies abroad. Further, there will be no marginteachers, in order to abide by the act. The number of money for loans up to INR4 lakh. For the loans abovehours specified by the act are 800 (200 days a year) INR4 lakh, margin money will be 5% for studies infor classes I to V and 1,000 (220 days a year) for India and 15% for studies abroad. Also, parents willclasses VI to VIII. have co-obligation but no security for loans up to INR4 lakh. For loan amount of INR4 lakh — INR7.5The act also specifies the minimum number of lakh, collateral will be in form of a suitable third-required teachers. For classes I – V, minimum party guarantee. And for loans above INR7.5 lakh,number of teachers should be two if the number of parents having co-obligation will have to providestudents doesnt exceed 60, three for 61 to 90 tangible collateral security along with assignment ofstudents, four for 91 to 120 students and five for 121 future income of the student for payment ofto 200. Further, for classes VI – VIII, schools will have installments.© Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 10
    • Business in Education September 2011Companies’ Score Card Debt- Price- Market Operating Equity Equity Price Margin Net Margin Ratio EPS Ratio change Q1-2012 Q1-2012 Q1-2012 Q1-2012 August 31, August (%) (%) (%) (INR) 2011 2011 (%)ComputerSoftwareTraining Aptech Ltd. 43.2% 41.5% 0.0% 6.81 99.42 -10.3%ComputerSoftwareTraining BITS Ltd. 25.0% 10.0% 0.5% N.A. N.A. -1.8%ComputerSoftwareTraining NIIT Ltd. -4.0% -6.2% 60.0% -0.60 42.71 -14.8% Software TechnologyERP for GroupEducational InternationalInstitutions Ltd. N.A. N.A. 112.7% -0.40 N.A. -9.6%ICT Birla ShlokaSolutions Edutech Ltd. 3.6% 2.8% 6.8% 0.70 4.44 -24.0%ICT CompucomSolutions Software Ltd. 30.4% 23.9% 52.5% N.A. 8.45 -11.0% CORE Education andICT TechnologiesSolutions Ltd. 39.2% 23.8% 81.9% 3.64 23.85 0.4%ICT EdservSolutions Softsyst Ltd. 42.6% 27.3% 12.2% 4.65 4.05 -13.7%ICT EducompSolutions Solutions Ltd. 41.5% 23.4% 41.3% 4.54 5.08 -37.9%© Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 11
    • Business in Education September 2011 Debt- Price- Market Operating Equity Equity Price Margin Net Margin Ratio EPS Ratio change Q1-2012 Q1-2012 Q1-2012 Q1-2012 August 31, August (%) (%) (%) (INR) 2011 2011 (%) EveronnICT EducationSolutions Ltd. 37.1% 16.4% 39.2% 5.75 10.97 -22.5% Comp-U- Learn TechIT Education India Ltd. 15.4% 6.7% 2.8% 0.11 11.94 -8.0% JetkingIT Education Infotrain Ltd. 17.3% 11.5% 0.0% 1.67 7.04 -15.6% Tree House Education &School AccessoriesEducation Ltd. N.A. N.A. 38.0% N.A. N.A. 8.2%SchoolEducation Zee Learn Ltd. -4.6% -5.2% 83.2% N.A. N.A. -9.5% Career Point InfosystemsTuitions Ltd. 40.0% 29.5% 0.0% 2.56 17.07 -14.5%© Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 12
    • Business in Education September 2011List of Organizations Bank of Baroda KLE Group of Institutions Baroda Manipal School of Banking Macmillan Bharat Sanchar Nigam Limited Manipal Education CORE Projects & Technologies Limited Matrix Partners Educomp Solution Limited Pearson Education Services Everonn Education Limited Repro India Everonn Education Limited Smart Technologies Facebook SP Jain Institute of Management & Research FC Advisors Sterlite Technologies Limited Harvard Business School Symbiosis Institute of Business HCL Infosystems Management Indian Institute of Management Tree House Education and Accessories Indian School of Business Limited Indira Gandhi National Open University University of Science Malaysia Yale University© Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 13
    • Business in Education September 2011DisclaimerThe information contained in this report is of a general nature and is not intended to address any particularindividual or entity’s circumstances. Although proper care has been taken to provide accurate and timelyinformation, there can be no guarantee that such information is accurate as of the date it is received or that it willcontinue to be accurate in the future. Indalytics Advisors Private Limited does not guarantee that the informationcontained in this report is authentic and reliable. No one should act upon such information without appropriateprofessional advice after a thorough examination of the particular situation.In order to get free subscription to Business in Education, please mail us at businessineducation@indalytics.comIf you want to advertize your products and services through this report, then please write to us atbusiness@indalytics.comPublication Volume: 11-009Publication Date – September 2011© 2011 Indalytics Advisors Private LimitedFor further information, please contact businessineducation@indalytics.com © Indalytics Advisors l www.indalytics.com l businessineducation@indalytics.com 14