Industry Awareness

Education Sector in India

Group 5
Abhijeet Srivastava
Abhinav Srivastava
Ajith U
Amey Kulkarni
Brajesh Kumar
Paripurnachari Vaddipati
Varun Krishnan
 Introduction

• Third largest higher secondary education

system in the world
• 480 universities and 22,000 colleges
• CAGR of 5.8% is higher than that of the
Personal Finance Consumption Index
• Estimated industry size is $80 billion
Regulations and Regulatory Bodies
• State and Central Boards
• UGC
• AICTE
• Medical Council of India
• Bar Council of India
• Approval for The National Commission for Higher
Education and Research (NCHER) Bill by October 2010

Private Equity in the Education Sector

• First educational institute to get venture capital funding
in India was Career Launcher from Intel Capital as early
as in 2000
• Eight deals worth $121 million were sealed in 2009,
compared with just two deals worth $73 million in 2006.
 Comparative Study on Quality of Primary
and Secondary Education in India
Gross
Enrolment Teacher per Teacher per
Ratio in students students
Primary (Primary (Secondary

 Overall Scores
Countries education Education) Education)
Brazil 148.5 NA 19
China 116.2 20 19
Russia 113.8 17 NA
Gross
Countries Scores Ranks
Indonesia 110.9 NA NA
Russia 7.28 1
South Africa 105.1 NA 30
China 6.77 2
India 98.1 40 32
Brazil 5.57 3
Mexico 5.42 4
 Some Facts
South Africa 3.89 5
India 3.29 6
Indonesia 2.68 7
Source: Selected Educational Statistics, Ministry of Human Resource Development, Government
of India, http://www.assocham.org/prels/printnews.php?id=1815
 Engineering Education Industry
History
• The first engineering college, the Civil Engineering College was
set up in Madras in the 1800s
• From a mere 50 engineering colleges in India in 1950, the
number has crossed 2,200 in 2009
• Main reason for this increase in demand is IT industry

Current Scenario, Growth and Opportunities

• The major players are IITs, IISC, NITs
• The governing body is All India Council for Technical
Education
• AICTE ensures coordinated and integrated development and
management of technical education in the country.
 Medical Education
• Expected CAGR 18%,Rs 35 billion market by 2012-13
• Over 3000 medical institutions for allopathic, homeopathic, unani,
ayurveda, siddha, nursing & pharmacy courses.
• Out of these only 1100+ offer courses in medicine and only 314 in
allopathic medicine commonly known as MBBS.
• India need 6 lac doctors,2 lac dental surgeon,1 million nurses.
• Currently India produces 35000 doctors (allopathic) & 21000 dentist per
annum.
• Medical enrolment has 3 % share in higher education enrolment.
• Six regulatory bodies for various courses.
• Central & state governments are only organized player.
• Major colleges are located in southern state including Gujrat &
Maharashtra.
• Large differences between demand & supply, a great opportunity lie lies
to capitalize.
• With growing economy students have means to pay for fee.
• Challenge is lack of quality manpower for faculty position.
 Coaching Classes
Market Value
• Unorganized sector, run by private owned
2008 2012 (E)
institutions
• Many regional players with less nation wide USD USD
presence 6.8mn 13mn

Market Need Key Players Business Trends

• Wide range of • 10th & 12th - Chate • Coaching institutes

coaching needs - IIT- Classes, Sri diversification - Pre-
JEE, AIEEE, AIIMS, Chaitanya, Brilliant, schools, k12 Schools,
BITSAT, CAT, GRE, FITJEE B Schools
GMAT, IELTS, TOFEL, • Professional Degree • Going online -
GATE Entrances – TIME, IMS, TestFunda, Cation,
• Heavy Competition CL TCYOnline.com,
for seats & Jobs • Computer Education askIITians
• Increased spending – NIIT, Aptech • Study material for
on education correspondence
courses - FIITJEE,
Brilliant, Rao IAS
Coaching Classes – Market Trend
For Computer Education
Company Name March 2010 Year (Rs Cr.)
Equity Sales NP Mkt. Cap. P/E
Computers - Education 282.82 2155.08 314.1 9207.47 26.5
Aptech 48.27 123.79 21.52 749.63 45.7
Birla Shloka 19.95 179.8 5.01 58.75 11.8
Compucom Soft. 10.05 59.43 9.29 190.2 21
Comp-U-Learn 19.16 18.39 4.63 33.34 7.3
Educomp Sol. 19.09 832.22 221.87 5,734.16 25.9
Everonn Educat. 15.12 210.65 43.4 1,086.98 25.3
NIIT 33.02 625.17 31.66 1,201.10 40.4
SQL Star Intl. 21.8 25.45 -18.13 29.69 0

Year 2010 2009 2008 2007 2006 2005 2004

No.Of Companies 20 11 14 15 14 14 15
Key Ratios
Debt-Equity Ratio 0.27 0.6 0.47 0.38 0.27 0.17 0.13
Current Ratio 1.91 2 2.21 2.14 2.16 1.81 1.72
Interest Cover Ratio 5.04 8.04 8.14 7.19 5.93 4.22 3.91
PBIDTM (%) 22.47 34.22 27.27 25.95 20.61 21.28 20.79
APATM (%) 7.67 13.39 12.81 11.9 7.14 6.34 7.77
ROCE (%) 11.21 19 14.97 13.46 10.42 8.75 10.3
 Business School Education
History
• The first management school IISWBM (at inception the institute was called 'All
India Institute of Social Welfare and Business Management') was established in
1953 at Kolkata.
• In 1961, India began to establish its network of prestigious state-run business
schools – the respected Indian Institutes of Management (IIM) in Kolkata
• Till now the number of B- schools grows 147% from 1990 to 2009

Current Scenario, Growth and Opportunities

• It has Scale of 1600+ B-schools and has excellence (think of IIM A or ISB)
• Numbers made available by the AICTE shows that business education market
in India is about Rs.30 billion in 2008 (campus and distance education
together) and growing at a rate of 12% CAGR in last 3 years.
• Booming local economy (growing @ 8%) and a lot of problems! Yes, these
'problems' in areas like Healthcare, Education, Infrastructure
development...are all opportunities for management community to research -
- for the world.
• Many foreign universities are also interested in entering India’s business
education market
• Indeed, come 2020, and India will be one of the Top 3 MBA destinations in the
world with 10+ global MBA institute brands. It is possible & will happen. India
has the potential to be a global powerhouse of MBA education
Studying Abroad: Popular Courses
Data from last year’s UK Education Exhibition shows the following trends:
• 50 per cent are interested in Business and Management
Courses
• 47 per cent of enquirers are self-funded students
• 38 per cent are interested in Medical and Health related
courses
• 31 per cent are interested in postgraduate degrees (masters or
doctorate degrees)
• 20 per cent are interested in undergraduate degrees or
certificates and diplomas
• 13 per cent are interested in certificate courses / non degree
courses

The above mentioned trend is almost similar in all the major countries
attracting foreign students.
 Market In India for foreign Universities
• India needs 1,500 universities, compared with about 350
now, to raise the enrolment numbers from 7 per cent of
the population aged 18- 25 to developed country
average.
• More than 100,000 students leave India annually to study
abroad. It made foreign universities realize that there's
another 'creamy layer' below these students abroad who
are are prepared to pay upwards of Rs 2.5 lakhs a year
for quality education.
• List of foreign universities in India:
– Virginia Polytechnic Institute and State University (Virginia Tech)
– Georgia Institute of Technology (Georgia Tech)
– Schulich School of Business
– Boston University
– Middlesex University
– Duke University
Regulations in India for foreign Universities
• The FEPs would be treated as Indian private universities and
allowed to set their own fee and would be exempt from
reservations .
• No repatriation of profits will be allowed. A foreign university
aspiring to set up a campus will also have to deposit Rs 50
crores as corpus fund and cannot take back the surplus
generated from education activities here. Moreover, a foreign
education provider shall, out of the income received from the
corpus fund, utilise not more than 75 per cent of it for the
development of its institutions in India.
• All colleges offering higher education need to be affiliated to a
university (in turn under the purview of the central regulatory
body called UGC – University Grants Commission).
• A foreign university seeking to establish an educational
institution in India has to do so by way of a registered trust or a
society and franchises from foreign universities are not
permitted.
References
• http://www.merinews.com/article/education-industry-is-booming-
too/129454.shtml
•http://timesofindia.indiatimes.com/business/india-business/PE-cos-look-to-
tap-education-market/articleshow/5521771.cms
•The Economic Times – Business of Education – 2005
•ICRIER report on higher education - http://www.icrier.org/pdf/WP_179.pdf
•http://www.c2clive.com/latestnewsdetail.php?id=281
•University_Grants_Commission_(India)
•All_India_Council_for_Technical_Education
•Bar_Council_of_India
•Medical_Council_of_India
•The_Right_of_Children_to_Free_and_Compulsory_Education_Act
•http://www.mciindia.org
•http://www.dciindia.org/
•http://www.cchindia.com
•http://www.ccimindia.org
•http://www.pci.nic.in/
•http://www.education.nic.in
•http://www.capitaline.com
•Coaching Classes India Report by Bharat Book Bureau
Thank You