Four-S Services - Research

1. Vol. 46, 15th Mar’12 – 31st Mar’12
Four-S EDUTRACK
Fortnightly Update on Indian Education Sector
In the Spotlight Content
Govt invites private companies to start secondary schools
In the Spotlight 1
Following a road map laid out in the budget, the Union government
has invited proposals from companies to open secondary schools. The
human resource development (HRD) ministry has sought expressions Investment Activity 2
of interest from companies in joining the public-private partnership
(PPP) project to open 2,500 schools over the next five years. Private
News and Policy Development 3
entities will procure the land, and design, develop, operate and
manage the schools while the government will offer a 25%
infrastructure grant and the recurring cost of education for students Corporate Developments 4
sponsored by it. Under the Right to Education Act, at least 25% of a
school’s students can belong to underprivileged families and are
entitled to free education. The government will pay for their schooling. Stock Market Performance 5
According to details in the ministry’s documents, even companies
Peer Benchmarking 6
without any experience in education can bid to open schools. “A
corporate entity would be eligible for one school for every `250mn net
worth subject to interest bearing deposit of `5mn each for up to three About Four-S Services 8
schools and `2.5mn per school thereafter,” it said. An education firm
already running at least one Central Board of Secondary Education
(CBSE) school—from which at least two consecutive batches have
graduated from class X—can qualify for three schools under the PPP
project. Firms with schools that have not scaled up to the class X level
will be eligible for one school, the ministry said in the document
explaining the eligibility framework. A company can qualify for three
schools if it has run educational institutes for five years and can deposit
`2.5mn for each school. While the interest from the deposits will
accrue to the government, the capital will be released to the company
in three annual installments after the school starts operation.
About Four-S Services
Four-S Services is India's leading provider of Research, Financial Consulting and Investment Banking services with offices in Gurgaon, Mumbai and
Bangalore. We have a proven track record of consistently delivering high quality solutions, enabling our clients to improve the effectiveness of
decision making and acting as a catalyst in achieving business success. We have executed more than 120 mandates across diverse range of
industries including Education, Financial Services, Infrastructure, M&E, IT-ITeS, Auto and Auto ancillaries, Retail, Real Estate and Textile etc
Our Services:
 Strategy Consulting  Research Support
 Business Planning  Valuation Services
 Investment  Investor Relations & IPO Consulting
Research Desk Banking
For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
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2. FOUR-S EDUTRACK
Investment activity
Private Equity
Date Investor(s) Target Stake (%) Amount ($Mn) Business Stage
23-Feb-12 Omidyar Network Anudip Foundation NA 0.7 Vocational Training Early
23-Feb-12 Mumbai Angels CarveNiche Tecnologies NA 0.2 e-learning Early
22-Mar-12 Omidyar Network EnglishHelper NA NA Vocational Early
22-Mar-12 Omidyar Network Akshara Foundation NA 1.0 K-12 Education Early
Content
20-Mar-12 Hyderabad Angels Edutor Technologies NA 0.4 Early
Development
Mergers & Acquisitions
Date Acquirer Target Stake (%) Amount ($Mn) Target's Business
10-Nov-11 TIME Veta 51% 12.1 Supplemental Education
9-Nov-11 Reliance Industries Extramarks Education Ltd 39% NA Supplemental Education
14-Dec-11 Career Launcher GK Publications NA NA Publications
Divya Knowledge Process
1-Feb-12 Comp U Learn Tech India 100% NA Education Services
Management
15-Feb-12 Aptech Syntea SA 8.3% NA Education Services
*Only last few deals listed above
M&A Deals
PE Investments
Investment Amount (in $mn) No. of Deals Total Transaction Value (in $mn) No. of Deals
90.0 10
9 6 6
80.0
70.0 8 5 5 5
60.0
6 4 4
In $mn
50.0
In $ mn
40.0
4 3 3
4 4.8 2
30.0 2 2
20.0 10.7 2
80.8 1 1
10.0
0.0
0.0 0 0 0
2011 2012 2011 2012
Four-S Indian PE Directory 2011 – “A Guide to choosing private equity partners“
 Detailed listing of ~330 Active PE/VC Investors in India - PE/VC players that have invested in the past 3 years.
 A first-of-its-kind, the directory offers “Deal History” in India for individual investor.
 Management, investment profile and Contact details.
 User-friendly Spreadsheet Format.
 It comes from Four-S Services, the most trusted deal information bank in India.
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
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3. FOUR-S EDUTRACK
News and Policy Development
UGC to devise AICTE-like rules for foreign varsity tie-ups India to roll out common entrance medical exam from 2013
Keen to forge collaborations between Indian and foreign India is all set to roll out NEET for medicine admissions from
varsities with or without Foreign Education Providers Bill, the 2013-14. For Under Graduate (UG) programs, exam will be
Union HRD ministry has asked the University Grants conducted by the Central Board of Secondary Education
Commission (UGC) to formulate regulations for facilitating (CBSE) while it will be the National Board of Examination
entry of foreign education providers in India. A UGC (NBE) that will conduct the Post Graduate (PG) exams. The
committee is being set up to devise these regulations, which Union health ministry has informed state governments that
are likely to be on lines of twinning formula of the All India their existing reservation policies would not be disturbed
Council for Technical Education (AICTE). The AICTE has drawn under the proposed scheme and state wise eligibility merit
up rules for collaboration and partnerships between Indian lists will be prepared for the respective state authorities to
and foreign institutes in the field of technical education and admit students for admission in accordance with their
students enrolled for these courses can complete semesters admission criteria in the institutions located in the respective
in partner institutes. Under similar UGC regulations, a foreign states. The qualifying criterion has been changed from
university would not be able to come to India and set up a percentage of absolute marks to percentile to ensure that no
standalone full-fledged campus on its own, it can however, do seat remains unfilled. NEET would mean a single entrance
so in collaboration with an Indian institute. Students enrolled examination will be held for MBBS and MD courses offered
will be able to complete one semester in the Indian institute by all 271 medical colleges. These colleges offer over 31,000
and complete the rest in the foreign institute. seats for MBBS courses and another 11,000 seats for PG
degrees.
AICTE says no to new institutes
76% RTE violations remain unresolved.
The All India Council of Technical Education (AICTE) has
decided to put a blanket ban on opening up of new Two years after the government's flagship education
engineering and management colleges across the country programme came into force, its monitoring body has not
from academic session 2013-14. India has nearly 3,500 been able to resolve as much as 76% cases of violation of the
management schools and over 4,000 engineering colleges. right to education (RTE) Act, an RTI document reveals.
The directive has come after the Council found that the supply Promising free and compulsory education to children from
is outstripping the demand for engineering and management the age group of 6 to 14, the Right of Children to Free and
st
seats in the country. According to note from credit rating firm Compulsory Education Act came into force on 1 April 2010.
CRISIL, the average occupancy rate declined in 2011-12 to An RTI query reveals that over the last two years, the NCPCR
around 67% for engineering colleges and about 65% for received 2,850 complaints regarding the RTE Act. However, it
business schools. has been able to resolve just 692 cases, or just 24% of the
entire lot by now.
Banks to rate institutes for providing Education Loans
World Bank offers $500mn loan for education in India
To tide over their bad loans and structure their loan products
in a better way, banks will now rate B-schools and other The World Bank has offered $500mn interest-free credit to
educational institutions. In a recent meeting between banks India for improving the standards of secondary education.
and over 150 education institutes, it was decided that Indian The World Bank credit will help the Indian government's
Banks Association (IBA) will come up with a rating model for efforts to make good quality education available, accessible
institutes. The process may take about six months. and affordable to all young people at the secondary level
(grades 9 and 10). The project will support all activities as
envisioned in the $12.9bn Rashtriya Madhyamik Shiksha
Abhiyan (RMSA) programme, a flagship government of India
programme for gradual universalization of secondary
education
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
Page | 3

4. FOUR-S EDUTRACK
Corporate Development
Azim Premji Trust to sell `15.3bn worth Wipro shares to fund Mexus Education partners with St. Xavier’s group of Schools
education in Uttar Pradesh
The endowment created by Azim Premji, one of the world's Mexus Education, a leading education technology solutions
most generous philanthropists, will sell `15.3bn worth of provider has partnered with St. Xavier's group of Schools in
shares gifted to it by the Wipro founder to fund an expansive Uttar Pradesh to complement the learning environment and
non-profit education initiative close to the heart of the philosophy of the Group. These schools have opted for
software billionaire. The Azim Premji Trust, which was gifted technology integration to further leverage the creativity of
213mn shares of Wipro in December 2010 (valued then at students by creating a complete learning environment. All
`88.5bn), will sell 35mn of them, the first time it is doing so the 45 schools of The Group spread over Varanasi, Allahabad,
since the endowment was created. The money will be used to Lucknow and other areas in Uttar Pradesh have opted for
fund the expansion of Azim Premji Foundation, which is digitization through partnership with Mexus. These schools
working to improve teaching and learning in some of India's have opted for complete school solutions including Iken
most backward districts. It will also help the Azim Premji Library for a digital classroom, Iken Evaluate for remote-
University scale up its teaching and research work. based objective test, Iken Learning Labs to introduce hands-
on conceptual understanding.
GIMS introduces 3D education in India
CL Educate ties up with NEC to provide free MBA entrance
Geo Information and Modeling Solution (GIMS) (Google ATC)
coaching
is introducing 3D education in India. For the promotion of the
3D education the company is looking for partners and is tying CL Educate, a leading education services provider in India, has
up with Local Resource Centres across the country via signed a MoU with the North Eastern Council (NEC) to
franchise route. There are plans to introduce Google Sketch provide MBA entrance preparation in the North Eastern
up and 3D technology in 1,000 schools and to educate one Region. The joint initiative aims to encourage economic and
lakh children every year. social development of the North Eastern Region by providing
impetus to the growth of the youth. As a part of this
Helix PE-backed MT Educare IPO Oversubscribed 4x programme CL Educate will prepare 200 students for MBA
entrance examinations (CAT/MAT) in Arunachal Pradesh,
MT Educare, a Mumbai-based K-12 tutoring and test
Nagaland, Mizoram, Sikkim and Agartala. The candidates will
preparation firm, has seen its initial public offering
be chosen on merit basis and will be coached and mentored
oversubscribed more than 4 times priced at `74-80 a share.
by CL Educate, free of cost, for 6 months in a 7 hr, 6 days
MT Educare is backed by India-focused private equity firm
intensive coaching program. The first batch of the
Helix Investments who would be making 2.5x returns (on the
programme is scheduled to start from April 2012.
upper end of the price band) in the part-exit from its four-
and-a-half-year-old investment. MT Educare had launched the
Shiv Nadar University announces collaboration with Babson
maiden public float with a mix of fresh issue and offer for sale
College of USA
by the financial investor. At the upper end of the price band,
the company is eyeing a valuation of `3.15bn, a little over 39x The Shiv Nadar University today announced a partnership
its one-year-old earnings, `80mn. The company is looking to with Babson College, the world's no. 1 business school for
raise up to `350mn through fresh issue of shares. entrepreneurship to offer global leading programs in
Entrepreneurship Education to India. Babson's MBA program
has been ranked no.1 for entrepreneurship for 19
consecutive years by U.S. News & World Report. Programs
will commence in 2013. Students completing the programs
successfully will obtain a degree issued by Shiv Nadar
University and a certificate from Babson College.
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
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5. FOUR-S EDUTRACK
Stock Market Performance
Market Cap Price Percentage Price Change
(`mn) (In `) 1 Week 1M 3M 6M 12M
Core Education 31,717 282 0.8% 3.6% 8.7% -3.7% -7.4%
Educomp 18,560 193 -0.6% -8.3% -3.6% -13.7% -55.1%
Navneet 13,805 58 -1.9% 2.9% 9.1% -11.0% 2.2%
NIIT Ltd 8,940 54 10.4% 15.1% 41.2% 20.6% -5.7%
Tree House 7,154 212 3.6% 1.7% 20.9% 21.6% -
Everonn 5,684 261 -4.0% -9.1% -22.0% -24.2% -47.5%
Zee Learn 3,868 15 -0.7% 5.1% 16.8% -21.9% 25.5%
Aptech 3,781 78 -6.4% -9.5% 11.0% -34.7% -25.0%
Career Point 3,518 194 -0.9% -13.2% -8.4% -28.6% -42.7%
Compucom 920 12 -3.8% -12.6% -9.1% -27.2% -33.4%
Edserv 757 29 -11.4% -17.3% -28.6% -66.9% -64.6%
Jetking 312 53 -3.8% -10.3% 5.8% -22.0% -53.7%
Peer Benchmarking
Interim Results
Revenues EBITDA PAT
Figures in Rs mn Year Ending Fiscal year Quarter
Current Last Year % growth Current Last Year % growth Current Last Year % growth
Educomp March 2011-12 Q3 3,738 3,680 2% 963 1,632 -41% 246 967 -75%
NIIT Ltd March 2011-12 Q3 2,501 3,007 -17% 251 370 -32% 407 129 216%
Core Education March 2011-12 Q3 4,793 2,946 63% 1,905 1,050 81% 1,027 579 77%
Navneet March 2011-12 Q3 841 746 13% 57 101 -43% 40 62 -35%
Everonn March 2011-12 Q3 922 1,153 -20% 159 439 -64% -105 189 -155%
Aptech March 2011-12 Q3 432 481 -10% 52 61 -15% 59 33 78%
Edserv March 2011-12 Q3 151 313 -52% 18 146 -88% 5 115 -96%
Career Point March 2011-12 Q3 214 185 16% 88 60 49% 115 54 110%
Compucom March 2011-12 Q3 169 207 -18% 92 117 -21% 21 26 -20%
Zee Learn March 2011-12 Q3 125 98 27% -110 4 NA -126 3 NA
Tree House March 2011-12 Q3 213 - 110 - 61 -
Jetking March 2011-12 Q3 79 94 -16% 13 29 -54% 6 19 -70%
Annual Results
Revenues EBITDA PAT % EBITDA % PAT
Figures in Rs mn TTM Quarter
TTM Y0 TTM Y-1 % growth TTM Y0 TTM Y-1 % growth TTM Y0 TTM Y-1 % growth margin margin
Educomp Q3 FY12 14,664 11,942 23% 4,754 4,915 -3% 2,248 2,594 -13% 32% 15%
NIIT Ltd Q3 FY12 14,359 11,882 21% 1,522 1,664 -9% 765 468 63% 11% 5%
Core Education Q3 FY12 14,536 10,327 41% 5,740 3,739 53% 3,141 2,095 50% 39% 22%
Navneet Q3 FY12 5,932 5,536 7% 1,348 1,256 7% 845 783 8% 23% 14%
Everonn Q3 FY12 4,037 3,954 2% 1,284 1,356 -5% 216 579 -63% 32% 5%
Aptech Q3 FY12 1,782 1,743 2% 177 168 5% 977 72 1253% 10% 55%
Edserv Q3 FY12 1,201 1,008 19% 357 452 -21% 205 337 -39% 30% 17%
Career Point Q3 FY12 777 761 2% 257 295 -13% 298 247 21% 33% 38%
Compucom Q3 FY12 703 678 4% 416 367 13% 125 106 17% 59% 18%
Zee Learn Q3 FY12 546 - -169 - -199 - -31% -36%
Tree House Q4 FY11 392 214 84% 176 69 153% 92 26 254% 45% 23%
Jetking Q3 FY12 339 408 -17% 57 118 -51% 27 85 -68% 17% 8%
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
Page | 5

6. FOUR-S EDUTRACK
Four-S Services Pvt Ltd
Founded in 2002, Four-S has a strong & successful track record of genuine, accurate and
objective advice to top Indian & global companies & PE Firms. Four-S has already proven
success in corporate finance, strategy consulting, fund-raising, investment banking and
investor relations mandates with 100+ corporates and large PE funds.
Four-S, trusted advisor to top Indian & Global Cos
Offering comprehensive bouquet of services to SMEs, Corporates and PE Funds
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
Page | 6

7. FOUR-S EDUTRACK
About Four-S Services
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Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
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