Four s fortnightly education track 15th march - 31st march 2012

Page | 1

Research Desk

Content In the Spotlight

In the Spotlight 1

Investment Activity 2

News and Policy Development 3

Corporate Developments 4

Stock Market Performance 5

Peer Benchmarking 6

About Four-S Services 8

Vol. 46, 15th Mar’12 – 31st Mar’12

Four-S EDUTRACK

FFoorrttnniigghhttllyy UUppddaattee oonn IInnddiiaann EEdduuccaattiioonn SSeeccttoorr

Govt invites private companies to start secondary schools

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

of interest from companies in joining the public-private partnership

(PPP) project to open 2,500 schools over the next five years. Private

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

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.

According to details in the ministry’s documents, even companies

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

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

Business Planning

Investment Banking

For further information, please contact Seema Shukla at [email protected] or reach us as http://www.four-s.com

Research Support

Valuation Services

Investor Relations & IPO Consulting

mailto:[email protected]

http://www.four-s.com/

Page | 2

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 [email protected] or reach us as http://www.four-s.com

FOUR-S EDUTRACK

Investment activity

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

20-Mar-12 Hyderabad Angels Edutor Technologies NA 0.4Content

DevelopmentEarly

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

1-Feb-12 Comp U Learn Tech India Divya Knowledge Process

Management100% NA Education Services

15-Feb-12 Aptech Syntea SA 8.3% NA Education Services

80.810.7

4

9

0

2

4

6

8

10

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2011 2012

In $

mn

PE InvestmentsInvestment Amount (in $mn) No. of Deals

4.8

0.0

5

2

0

1

2

3

4

5

6

0

1

2

3

4

5

6

2011 2012

In $

mn

M&A Deals

Total Transaction Value (in $mn) No. of Deals

*Only last few deals listed above

Private Equity

Mergers & Acquisitions

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.

Page | 3

Research Desk


FOUR-S EDUTRACK

News and Policy Development

UGC to devise AICTE-like rules for foreign varsity tie-ups

Keen to forge collaborations between Indian and foreign

varsities with or without Foreign Education Providers Bill, the

Union HRD ministry has asked the University Grants

Commission (UGC) to formulate regulations for facilitating

entry of foreign education providers in India. A UGC

committee is being set up to devise these regulations, which

are likely to be on lines of twinning formula of the All India

Council for Technical Education (AICTE). The AICTE has drawn

up rules for collaboration and partnerships between Indian

and foreign institutes in the field of technical education and

students enrolled for these courses can complete semesters

in partner institutes. Under similar UGC regulations, a foreign

university would not be able to come to India and set up a

standalone full-fledged campus on its own, it can however, do

so in collaboration with an Indian institute. Students enrolled

will be able to complete one semester in the Indian institute

and complete the rest in the foreign institute.

AICTE says no to new institutes

The All India Council of Technical Education (AICTE) has

decided to put a blanket ban on opening up of new

engineering and management colleges across the country

from academic session 2013-14. India has nearly 3,500

management schools and over 4,000 engineering colleges.

The directive has come after the Council found that the supply

is outstripping the demand for engineering and management

seats in the country. According to note from credit rating firm

CRISIL, the average occupancy rate declined in 2011-12 to

around 67% for engineering colleges and about 65% for

business schools.

Banks to rate institutes for providing Education Loans

To tide over their bad loans and structure their loan products

in a better way, banks will now rate B-schools and other

educational institutions. In a recent meeting between banks

and over 150 education institutes, it was decided that Indian

Banks Association (IBA) will come up with a rating model for

institutes. The process may take about six months.

India to roll out common entrance medical exam from 2013

India is all set to roll out NEET for medicine admissions from

2013-14. For Under Graduate (UG) programs, exam will be

conducted by the Central Board of Secondary Education

(CBSE) while it will be the National Board of Examination

(NBE) that will conduct the Post Graduate (PG) exams. The

Union health ministry has informed state governments that

their existing reservation policies would not be disturbed

under the proposed scheme and state wise eligibility merit

lists will be prepared for the respective state authorities to

admit students for admission in accordance with their

admission criteria in the institutions located in the respective

states. The qualifying criterion has been changed from

percentage of absolute marks to percentile to ensure that no

seat remains unfilled. NEET would mean a single entrance

examination will be held for MBBS and MD courses offered

by all 271 medical colleges. These colleges offer over 31,000

seats for MBBS courses and another 11,000 seats for PG

degrees.

76% RTE violations remain unresolved.

Two years after the government's flagship education

programme came into force, its monitoring body has not

been able to resolve as much as 76% cases of violation of the

right to education (RTE) Act, an RTI document reveals.

Promising free and compulsory education to children from

the age group of 6 to 14, the Right of Children to Free and

Compulsory Education Act came into force on 1st

April 2010.

An RTI query reveals that over the last two years, the NCPCR

received 2,850 complaints regarding the RTE Act. However, it

has been able to resolve just 692 cases, or just 24% of the

entire lot by now.

World Bank offers $500mn loan for education in India

The World Bank has offered $500mn interest-free credit to

India for improving the standards of secondary education.

The World Bank credit will help the Indian government's

efforts to make good quality education available, accessible

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

Page | 4

Research Desk


FOUR-S EDUTRACK

Corporate Development

Azim Premji Trust to sell `15.3bn worth Wipro shares to fund

education

The endowment created by Azim Premji, one of the world's

most generous philanthropists, will sell `15.3bn worth of

shares gifted to it by the Wipro founder to fund an expansive

non-profit education initiative close to the heart of the

software billionaire. The Azim Premji Trust, which was gifted

213mn shares of Wipro in December 2010 (valued then at

`88.5bn), will sell 35mn of them, the first time it is doing so

since the endowment was created. The money will be used to

fund the expansion of Azim Premji Foundation, which is

working to improve teaching and learning in some of India's

most backward districts. It will also help the Azim Premji

University scale up its teaching and research work.

GIMS introduces 3D education in India

Geo Information and Modeling Solution (GIMS) (Google ATC)

is introducing 3D education in India. For the promotion of the

3D education the company is looking for partners and is tying

up with Local Resource Centres across the country via

franchise route. There are plans to introduce Google Sketch

up and 3D technology in 1,000 schools and to educate one

lakh children every year.

Helix PE-backed MT Educare IPO Oversubscribed 4x

MT Educare, a Mumbai-based K-12 tutoring and test

preparation firm, has seen its initial public offering

oversubscribed more than 4 times priced at `74-80 a share.

MT Educare is backed by India-focused private equity firm

Helix Investments who would be making 2.5x returns (on the

upper end of the price band) in the part-exit from its four-

and-a-half-year-old investment. MT Educare had launched the

maiden public float with a mix of fresh issue and offer for sale

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

its one-year-old earnings, `80mn. The company is looking to

raise up to `350mn through fresh issue of shares.

Mexus Education partners with St. Xavier’s group of Schools

in Uttar Pradesh

Mexus Education, a leading education technology solutions

provider has partnered with St. Xavier's group of Schools in

Uttar Pradesh to complement the learning environment and

philosophy of the Group. These schools have opted for

technology integration to further leverage the creativity of

students by creating a complete learning environment. All

the 45 schools of The Group spread over Varanasi, Allahabad,

Lucknow and other areas in Uttar Pradesh have opted for

digitization through partnership with Mexus. These schools

have opted for complete school solutions including Iken

Library for a digital classroom, Iken Evaluate for remote-

based objective test, Iken Learning Labs to introduce hands-

on conceptual understanding.

CL Educate ties up with NEC to provide free MBA entrance

coaching

CL Educate, a leading education services provider in India, has

signed a MoU with the North Eastern Council (NEC) to

provide MBA entrance preparation in the North Eastern

Region. The joint initiative aims to encourage economic and

social development of the North Eastern Region by providing

impetus to the growth of the youth. As a part of this

programme CL Educate will prepare 200 students for MBA

entrance examinations (CAT/MAT) in Arunachal Pradesh,

Nagaland, Mizoram, Sikkim and Agartala. The candidates will

be chosen on merit basis and will be coached and mentored

by CL Educate, free of cost, for 6 months in a 7 hr, 6 days

intensive coaching program. The first batch of the

programme is scheduled to start from April 2012.

Shiv Nadar University announces collaboration with Babson

College of USA

The Shiv Nadar University today announced a partnership

with Babson College, the world's no. 1 business school for

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.

Page | 5

Research Desk


FOUR-S EDUTRACK

Stock Market Performance

Peer Benchmarking

Market Cap Price

(`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%

Percentage Price Change

Interim Results

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%

Revenues EBITDA PATYear Ending QuarterFigures in Rs mn Fiscal year

Annual Results

TTM Y0 TTM Y-1 % growth TTM Y0 TTM Y-1 % growth TTM Y0 TTM Y-1 % growth

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%

TTM QuarterRevenues EBITDA PAT % EBITDA

margin

% PAT

marginFigures in Rs mn

Page | 6

Research Desk


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

Page | 7

Research Desk


FOUR-S EDUTRACK

About Four-S Services

Four-S Services provides customized business and financial research to organizations across the globe. The

company also provides Investor Relations consulting to corporate based on in-depth sectoral and company

research. The company has an impressive client profile and a team of senior analysts covering key sectors

including Finance & Banking, IT & Telecom, Retail, Media & Entertainment, Pharmaceuticals, Infrastructure

and Manufacturing amongst others. For further information on the company please visit www.four-s.com

Disclaimer

The information contained herein has been obtained from sources believed to be reliable but is not

necessarily complete and its accuracy cannot be guaranteed. No representation, warranty, guarantee or

undertaking, express or implied, is made as to the fairness, accuracy or completeness of any information,

projections or opinion contained in this document or upon which any such projections or opinions have been

based. Four-S Services Pvt Ltd. will not accept any liability, whatsoever with respect to the use of this

document or its content. This document has been distributed for information purposes only and does not

constitute or form part of any offer or solicitation of any offer to buy or sell any securities. This document

shall not form the basis of and should not be relied upon in connection with any contract or commitment

whatsoever. This document is not to be reported or copied or made available to others. The Company may

from time to time solicit from, or perform consulting, or other services for, any company mentioned in this

document.

http://www.four-s.com/