Where do you belong?Brick Wall TempleSyndrome Perspective Colored Sugar Water Global Identity for young-at-heart achievers A Cobbler Champion’ companion in success Large Conglomerate Role Model business institution Coaching Institute Realizing Potential and making dreams come true
Strong Management Team Satya Narayanan R. Alumnus, St. Stephen’s and IIM Bangalore Chairman Worked with Ranbaxy for a short period of time before setting up CL in 1995 Gautam Puri Engineer and alumnus, IIM Bangalore Vice chairman and Managing Worked with Hindustan Lever, Britannia and VAM Organics before joining CL in 1995 Director NikhiI Mahajan Alumnus, Benares Hindu University (Electrical Engineering) and IIM Bangalore Director, Chief Financial Officer Has worked in Management Consulting with AF Ferguson R. Sreenivasan Alumnus, JNU and IIM Bangalore Director, Head innovation and Had successful stints with TCS and Sony Entertainment Television, prior to joining CL design Motivation guru Sujit Bhattacharyya Alumnus, IIT Kharagpur and IIM Bangalore Director, Indus World School Enjoyed successful stints at Telco and Wipro and set up Dharma Systems, a US based software firm (IWS) R Shiva Kumar Alumnus, IIT Madras and IIM Calcutta Director, Academics Had a brief stint with HTA before joining CL Sanjeev Srivastava Alumnus, DU (Bachelors in Economics and Post Graduation in Sociology) President, Emerging Business Worked in the Civil Services and as a core member with the Times, HDFC Bank and Kotak Mahindra Groups Sanjay Shivnani Alumnus, REC (Electrical Engineering) and IIM Lucknow President, Vocational Has spent several years working at 3M India in the sales and marketing functionsThe driving force behind CL – Highly qualified and experienced management team supported by a strongteam of level 2 managers
CL Educate – Ideal Platform in the $80bn Indian Education Market Premium Brand created Highly Competent Highly Attractive Industry Diversified Platform and Robust Business Model through Differentiated Management Team and with Long-term Growth Offering Mix Covers 80% with Strong Operational Value Proposition and Robust Governance Drivers of the Addressable Market Track Record Consistent Innovation Structure Large but nascent market Services: Presence Differentiated 80,000+ students served One of the most with strong growth drivers across the student pedagogical approach annually experienced management Attractive demographics - lifecycle and learning that is focused on Consistently ranked as teams in the Indian ~62% of Indian needs student outcomes the #1 MBA and Law education sector population in the 0-30 Products: Credible Allows company to test preparation Graduated from years age group offerings across verticals command premium in franchise India’s top universities Severely undersupplied through an unmatched the market Realized 16% annual such as IIMs and IITs market - ~3% of GDP product portfolio of 20 Credible offerings growth in revenues over Close-knit team that has spent on education vs products across verticals through the past 5 years stayed together since ~6% in developed Geography: Pan-India an unmatched portfolio Capital-efficient hybrid inception in 1995 economies presence: through + of 20 products model (tailored by Strong corporate Inefficient and low quality centers and  K-12 Highly evolved and vertical) and integration governance structure with public education system schools proven content with technology allows well-regarded independent creating supply gaps in K- 12 schools and skill Customers: B2C developed over 15 years for scalability while board members development space (Business to Consumer), Holistic approach to lowering capital intensity Backed by marquee B2B (Business to quality resulting in high Tangible synergies investors such as Gaja Inelastic demand for Business) and B2G private education driven parent and student across verticals by Capital, Granite Capital and (Business to satisfaction sharing managerial HDFC by long-standing Government) models expertise, infrastructure perception of quality and resources Self-pay market mitigates funding risk__________________Source: Company information, industry research.
Highly Attractive Market with Long-term Growth Drivers (mn) Largest school aged 400 320 320 population globally Favorable 100 90 Demographic 200 100 110 13 World’s largest working 120 120 20 5 Trends 0 age population drives need India China US UK for skilling solutions 15-19 20-24 25-29 (% of 2010 GDP Spend) Inadequate public and 8% 6% 6% 5% private sector investment 5% $80bn 4% 4% 3% in education Supply-side market with Constraints 0% Poor quality of publicFundamental North Western Middle East Sub- China India offerings further reduces America Europe Saharan effective supply long-term Africa Growth (% of students attending private schools) Long history of private Drivers 40% education and association 24% 22% 24% Growing Demand 21% 17% 19% with higher quality 20% 13% 9% for 8% Decreasing price sensitivity Private 0% Education Primary Middle Secondary and Higher as quality of education Secondary assumes significant 1996 2008 2012 importance Share of Public Sector in education spend (%) Relatively light regulatory 70% restrictions in multiple verticals Limited 68% Regulatory and 65% Greater recognition of the need Funding 63% for private sector leading to a Restrictions 60% supportive policy environment FY FY FY FY FY FY FY FY FY FY FY 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Private-pay model mitigates funding risk__________________Source: Industry Research.
Structure of the Indian Education MarketFormal sector to see large investments as the currently low GERs represent a huge opportunity
High demand for test preparation….. 2% 33% NA 4% 0.2% 2% 4% 10% 13% 7% NA NA Although IITs and AIEEE have significantly 2,000 For example, only 1 out of 150 applicants increased capacity in the past 5In ‘000 get admission into the elite Indian Institute years, there are still 40-50 applicants per of Management (IIMs) compared to a ratio spot, versus 10 applicants per spot at MIT Very few seats at Institutes / colleges are of 1:11 for Wharton in the US in the US available compared to the number of students taking the entrance examinations… 1,000 500 472 300 350 205 180 200 100 35 40 60 5 20 1 10 5 1 15 21 NA NA NA CAT/XAT MAT/Others CA/CPT Bank PO CSAT IIT JEE AIEEE State - BBA/HM Law GMAT GRE Engineering Source: Press Release for each exam. Based on 2010 Data Seats Available Aspirants Success Rate Leading to a robust growth in the test preparation industry… 14 Test preparation and training industry is expected to 136 grow at a CAGR of 16% (FY10P-13P) on account of: 8 Shortage of quality education institutes INR bn 5 60 Inadequate level of teaching in the formal 29 education system 407 285 Low capital requirements and higher returns 211 2006-07 2009-10P 2012-13P Curriculum based coaching Graduation test prep Postgraduation test prep Source: Company estimates, Research reports
Along with changing dynamics of the industry…. Along with changing dynamics of the industry….2011 – industry structure 2015 – industry structure MBA: 3 national players account MBA MBA for more than 85 % of market Law Law: With one single IAS exam, market is highly IAS, Law, MBA Law along with other concentrated, with CL Concentration of market Concentration of market having significant market aptitude based share tests, will become national, online and Engineering: the market will get Engineering: Highly Along with concentrated in the fragmented with more other hands of few Engg. than 12-15 large players; knowledge players Engg. biggest player with <2% based tests, market share will remain It is expected that fragmented Engg will also slowly move towards aptitude based test IAS IAS: Fragmented market with no significant player Knowledge based tests Aptitude based tests Evolution of market Evolution of market Tectonic Shift Aptitude test to replace preliminary examination in 1st stage New JEE pattern to include an aptitude test for the exam for Civil Services Examination from 2013 Will benefit players like CL as more exams move towards aptitude based
Vocational training – addressing the “skilled manpower” gapVocational training – a large opportunity With high skilled manpower demand expected Indian vocational training services market expected to be a US$3.6bn market by CAGR 58.2% 3.8% 19.8% 8.0% 14.6% 2012 (As per IDFC SSKI research report) 176 Manpower (#, in mn) Majority of educated Indians (graduates & post graduates) are unemployable due to lack of technical education CL’s target sectors for B2B Countries like Korea, Germany and UK have 96%, 75%and 68% vocationally offerings trained workforce respectively 60 43 As per a recent report, out of 100 graduates only 10 were found employable 16 9 (Source: UNESCO, Indian Planning Commission paper) 3 3 4 2 8 Retail Tourism Healthcare BFSI IT/ITeSNote: *National Sample Survey Organization, Vision 2020 Source: NSDC, Vision 2020 2008 2022EAnd significant government focus Key players Government has set a goal of training 500 mn people Various schemes have been launched at center and state levels for training people NSDC is targeting to train 150 mn people by 2022 with funding requirement of upto INR 150 bn; equity of INR 10 bn mn has already been infused by the government Various state governments together have annual budget of INR 50 bn for skill training purposes
Kaplan - The Journey (1995-2004-2011)From a small test prep company, to being a pioneer in online higher education, K12 and professional training1995 2004 2011 3% 10% 7% 28% 14% 47% 57% 100% 12% 22% ~ $ 89 Mn $ 1,135.9 $ 2,465.0 Mn Mn Test Prep HE TP PT Score! International HE TP International Ventures• Founded in 1938, • $1 billion in revenue in 2004, • ~500 locations in more than 30• Acquired by The Washington Post • Around 400 centres across countries Company (1984) USA, Canada, South • # Enrollments ~750,000• 150 centres across America, Europe, Australia and • Washington Post Company - USA, Canada, Puerto Rico and Asia “education and media company” London (UK) • # Enrollments ~ 5,00,000• # Enrollments ~ 1,35,000 Initial Foundation Continued Diversification Redefined Higher Education Landscape (1938-1995) (1996 – 2004) (2005-2011)Source: The Washington Post Company Annual Reports and Press Releases
CL Educate - The Journey (2006-2012-2015) From a humble beginning, to being a credible brand name having strong platform and well diversified business model 16% 7% 2006 0.05% 2012 2015 (P) 10% 33% 11% 44% 39% 99.95% 40% INR 5,387 lakhs INR 18,467 lakhs INR 37,975 lakhs Test Prep K-12 Test Prep Voc. & FE CL Media K-12 Test Prep Voc. & FE CL Media K-12 Key Milestones • Career Launcher India Ltd. • 1st franchisee • Acquisitions for entry into • Buy-back of Intel • Launch of Employability Training; founded; started with a PDP center in CET, Engineering and Law Test Capital acquired Kestone to strengthen program for CAT aspirants Modinagar Preparation training; agreement with Government of Rajasthan under Rajasthan Mission • Acquired KITS (2000), ARC and of Livelihood (“RMoL”) LST (2004) respectively1995 1997–1998 1999 2000 2000–2004 2005 2006 2007 2008–2010 2011 • Pegasus – first product for CAT • Investment by Intel • Foray into K-12, Higher • Investment by Gaja • HDFC takes a launched Capital Education and Vocational Capital in CL stake in K-12 training business • Extended into other domains with Magic Lamp (BBA/Hotel/ • 1st Indus World School (“IWS”) Law/Fashion) opened in Hyderabad
One of India’s leading Education Services PlayerA Credible Brand Name… …having strong platform and well diversified business model..• Founded in 1995 by alumnus of IIM –B • Unique educational platform given its vast presence and captive• Superior track record in delivering strong student outcomes and network of highly experienced franchisees one of the most respected education brands in India • Diversified from test prep company to a full service education• A market leader in test prep; current offerings include company • Test prep and training services • Growing “institutional ” service offerings • Education publication • Vocational and employability training & Further Education • K-12 schools• Backed by Gaja Capital and HDFC Limited…With a Pan India presence… …and Quality Management Team at helm • Led by one of India’s most talented and entrepreneurial education management teams • One of the most stable Management team together for close to 12 years • Track record of introducing new products, entering new cities and expanding into new businesses rapidly • A team with over 100+ individuals from IIT’s / IIM’s and other Test Prep leading institutions Vocational K-12 Schools
Favorable Industry DynamicsPresence in attractive segments Test preparation & Training, Media and Publishing Vocational Training & Further Education• Over 2 million students take exams every year • Indian workforce currently stands at 460 million • More than 7000 private engineering colleges • Largely untrained and unorganized • 4000 business schools • Only 25% of fresh graduates are employable • More than 300 private medical colleges • Estimated market size $4 bn in FY12 and growing at a CAGR of• Estimated market size $3 bn in FY12 24% (FY08-12)• Publishing Business over $ 2 Billion in FY 12 High ROI Huge untapped potential Low Capex requirement Opportunity to partner with leading corporates K12 Education School going population of India increasing by 20 million every year Government schools suffer from poor quality infrastructure Increasing disposable income enhances propensity to spend on education Estimated market size of $34 bn in FY12 and growing at a CAGR of 14% (FY08-12) Huge demand‐supply gap: 20,000 – 25,000 new K12 schools required annually for urban middle class Government’s initiative to push for PPP in K-12 seen as a potential game changer
ePravaalCL Educate powered by technology – The schools interacting and engaging
Who are we looking for• Fire in the belly • Entrepreneurial• Fearlessness • Tech in education• Future anchored • New media• Questioning • Teaching and status-quo facilitating
Model• Entrepreneurial progression: – Many who are entrepreneurial have taken their entrepreneurial dreams to greater heights being part of CL, by merging • Eg: Law school entrance - Sachin Malhan; – Over a hundred have started their own enterprises, over time, after being part of CL • Eg: Sports portal - Arjun Wadhwa• Intrapreneurial Progression: – Started with CL as a management trainee, been there for a few years then moved out to other corporate • Eg: Adi - Google Asia HR head… many many more..• Interns – Those who have done short stints with CL, across any of the verticals • Eg: Rahul Govind - IIM grad, went on to do his Ph.D in the US, and is a Mktg Prof in an IVY league B-school