The Business called Education! - Economic Times - 06/01/2008

The education space is buzzing with activity, with various private players venturing out to get a slice of the hugely untapped market

Shreya Biswas

IT’S boom time for the education sector in India as the concept of ‘business of education’ catches on with India Inc. Considered a ‘social responsibility’ all these years till now and plagued by insufficient infrastructure, the Indian education sector has huge room for improvement.
Increasingly, there are companies on the horizon providing e-learning services, tutoring for kids, coaching institutes expanding their ambit to provide mainstream education, setting up schools, entering the B-school segment et al. Companies like Educomp, NIIT, Tutorvista, Zee Integrated Learning System, Career Launcher, Extramarks, an online tutoring portal for kids, Aptech, Time, IMS, skill enhancement company Abacus Learning are all party to this. Another highlight of the change is the public-private partnership model on which much of the growth of this sector is pinned on. It’s the kind of transition that’s sweeping the Indian education system. Gaja Capital’s $8.25 million investment in Career launcher, Helix Investments pumping in $12 or Mahesh Tutorial and SAIF Partners investing $10 in an English training Academy Veta, are all indications to this. Instances like these are plenty.
Sample this. Career launcher, a leading testprep company, plans a major expansion across Asian countries like Singapore, China, Japan, Korea, Indonesia, Thailand, Taiwan and the US as well as on the home turf. It plans to invest close to Rs 200 crore in the next three-five years for the same. Besides, it will also launch job-oriented courses for emerging sectors like retail and insurance in the beginning of 2008. All this is in sync with the activities triggered in the education space with various private players venturing out to get a slice of the hugely untapped education market, feel experts.
The company also has elaborate plans on school education. Besides, it has also come up with a B-school in the NCR regionSays Sanjay Shivnani, CEO and president, Career launcher: “The boom is just starting. You will see more corporates entering the sector as education becomes highly specialised and gets categorised as an industry.”
Surely this is in sync with the scope. According to a conservative estimate the entire education market could be pegged at Rs 150,000 crore. About 540 mn people are under the age of 26 and at least 10 lakh individuals could be seeking management education. Out of this, 2.5 lakh itself take the common admission test every year. It’s a whole world of opportunity waiting to be tapped.
Not surprising then that companies are rushing to make the most of it, investing huge sums. Educomp, a major education company recently forayed into formal education with the launch of Millennium schools. Millennium Schools will use the Millennium Learning System (MLS), a fully integrated learning delivery system for Schools developed by Educomp. In the next three-four years, there will be 150 millennium schools in the country which will be set up across Indian cities by independent trusts and societies.
Tutorvista, which has been primarily known as a tutoring giant for overseas market, too bets big on its India plans. Starting operations two years back, the company has already raised $15.25mn from PE firms and another $2.5 mn in a strategic investment from Manipal in the last 18 months. In fact, it plans to raise around $50 mn in the next two years to support its foray into various segments of education. Through the recently acquired Edurite-K, it has got into the content business and now plans to set up 30 brick n mortar test centres by April 2008 for 9-12th grade students, besides providing entrance prep services.
Says K Ganesh, CEO & founder, Tutorvista.com; “India can become the education capital of the world and our plans to foray into test prep, vocational education, formal education are all in sync with this trend.”
In the e-learning space too, a subset of the education sector, several companies have been witnessing substantial growth. Also NIIT, a major IT training company, has invested around Rs 150 crore in the last two years itself in creating new offerings for sectors like insurance, banking and others. The spend will average around Rs 60-70 crore in the next two years too.
Another example is Educomp, which is growing at 200% every year, and working with 5,950 government schools to set up learning labs, a virtual classroom and digital library. The success of e-learning has in fact prompted the government to increase spend on IT-aided education to Rs 600 crore from Rs 250 crore last year under the Sarva Shikhsa Abhiyan and ICT@schools schemes This also comes under the ambit of public private partnership that the Indian govt is trying forge to better the entire system. “Private sector participation, PPP model and the supplementary education services like coaching and mentoring will be the biggest growth areas for the sector going forward,” says Educomp CEO Shantanu Prakash.
Only if the efforts to revive the Industrial Training Institutes (ITIs) are taken into consideration, results would be immediately visible. The government’s announcement to provide financial support for the upgradation of ITIs through public-private partnership has given a new lease of life to the scheme. A total of 1,396 ITIs have been proposed to be upgraded into centres of excellence in specific trades and skills under PPP. According to CII, companies such as Hero Honda, ITC, L&T, Ashok Leyland, BHEL, Coca Cola, HCL, Wipro, Kirloskar and TATA have already shown interest in adopting ITIs for upgradation.
In the higher learning space though, due to regulations, it has not been possible to extend the services, though experts believe with some flexibility in increasing the number of seats, deciding on the pay packages et al, institutions would be able to plug the gap between demand and supply.