Friday, May 21, 2010

India's Education Ind.....a $80 bn Plus Ind....

Friends,
When I read today in ET , I was awed strucked.....I never imgained that education  sector can be as big as $80 bn , means Rs.3,60,000 cr sector if we convert it in rupees....
It means that there is ample scope for more players to get the pie......we have big players like Educom, Evveron, NIIT etc....and upcoming players like Edserve, which I also missed at 43 ....and I feel even at 200 it is looking excellent pick.....
But I have already mentioned in my recent post about First Object Technology which is in education space....and I remember that in one of my reply I mentioned about DMC Int.
Keep a watch on DMC Int , read all annoucement at bse on DMC Int and if found good one can have exposer there.....
Dow tanked today by over 300 points and hence we will also open with a big gap down.We may see more downside after that as well.But buy stocks which are fundamentally sound in staggered manner , buy more on dips........

Well, I may prove wrong on market direction and market may dip more then I expect and hence I leave it to my readers what they wants to do.........I have proved wrong in 2008 and I may again prove wrong in 2010.........I donno exactly what can be the consequences of European financial crisis..........where the world economies and market will react and how much time it will take to stabilze the market......
I will only write here , that I am staying invested....as I did in whole 2008 year......

Rajeev




PE players line up for a share of education pie



PE/VC Firms Pump In $140 M So Far This Year, 50% More Than In Entire ’09
Dibyajyoti Chatterjee MUMBAI.
EDUCATION has emerged one of the most profitable businesses in India, making private equity investors enroll in big numbers to the $80-billion plus industry, anywhere from pre-schools to B-schools.
Numbers crunched by education-focussed private equity fund, Kaizen Management Advisors, show that venture capitalists and private equity players have pumped in excess of $140 million so far this year, 50% more than what they invested in the whole of 2009, as their search for value investment opportunities takes many funds to the hotbed of Indian education.
“We feel the education sector offers tremendous growth potential and is poised for rapid growth in the next few years,” says Ramesh Venkat, chief executive of Reliance Equity Advisors, a private equity arm of Reliance Capital, which entered the segment a few months ago by investing about Rs 100 crore in Pathways World School, a primary and higher secondary school.
The total VC/PE investment in the sector is likely to be around $300 million this year, says Sandeep Aneja, MD of Kaizen Management Advisors. Dhanraj Bhagat, partner at research firm Grant Thornton, says investments in education sector will grow 40-50% every year. There are about 25 PE/VC players in the market actively looking for good deals, and around10 deals have been done in the past few months.
Last week US-based VC firm Foundation Capital made two back-to-back investments: Rs 31 crore in Tree House Education, a company that operates in the pre-school and K-12 category; and Rs 20 crore in Aspire Human Capital Management, a Gurgaon-based employability enhancing firm. “We are interested in investing in large markets which have scale,” says Ashu Garg, partner, Foundation Capital. “It is estimated that about 70 million young Indians suffer from employability skill mismatch,” he adds.
Lack of regulation in K-12, or kindergarten to class XII, segment and supplementary education has made education attractive for investors. Matrix Partners India, too has invested Rs 59 crore in Tree House in two tranches; Rs 50 crore in 2008 and Rs 9 crore this month. Rajesh Bhatia, chairman and managing director of Tree House Education, declined to reveal the stake of PE firms, but said the promoters have more than a 51% stake in the company.
Tree House runs 135 preschools across the country and has expanded in the K-12 segment in the past 18 months. It runs the schools under management contract. The pre-school segment is worth $2 billion but is growing at an annual rate of 40-45%, according to Rishi Navani, co-founder and managing director of Matrix Partners.
Matrix Partners last year invested Rs 100 crore in FIITJEE, a coaching institute focused on training for IIT entrance exam. The engineering coaching business market is worth Rs 10,000 crore, said Mr Navani. The education sector began heating up in 2005.

21 comments:

  1. Dear Rajeev,

    Which primal group company looking promising.
    Primal Glass , Windsor machine , Primal Health

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  2. Dear rajeev,

    I had seen one of announcement in california software . its subisdary buy one of company that handels ebooks of some of good MNC publishing house.

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  3. Sir Rajeev, you are dealing almost all subjects the other day you were talking Oil and next day Defense and today Education...I dont know how to thank you for giving me subscription on your blog.

    Meanwhile please give calls in Textile and IT sector sir...

    Thanks
    Kapil...

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  4. Kapil,

    Rajeev had already given so much recommendation on IT before. Checkout his previous entries and also comments

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  5. Rajiv ji
    once i trap in dmc international@ 30 than share come near 5 level. i buy 10 time more near 5 and exit near 15 level. in my view this is real estate share but today i know after read your nassage that this is in education sector also.
    i see every day bulk deal in dmc intl in ET.
    please sujjest what is best price to enter in dmc intl.
    R ajiv bhai
    any view on visu international??????????

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  6. Ashok,
    I can't give u at what price u can enter as it can go down after that....this is market....no one a 100% correct...I wrote in my latest post that buy in staggered manner....
    For Market...I think 4500 nifty should be the bottom....but I can go wrong....4500 is the Max I am seeing....

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  7. Rajeevji. I am accumulating Jetking Infotainment. As it is into lower end computer education and many trained people in this level are required going forward I am of the opinion that the comopany should do well. Have you analysed this stock?

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  8. Hi CCRoy,
    I do not track Jetking Info....I usually do not track above 100, with some exceptions....because after 100....for multibager return the stocks needs to go to 400-500 or 1000 and if the growth is not there for the stock to touch 400-500-1000 then it use to stabilze for long period of time at same level....
    I am explaining this to you as you understand it properly ....
    Edserve is a new player and still it is quoted more then Jet King...Why?Becuase the management is agressive...like taking over Co and expanding through inorganic growth.....
    and that is what market likes.....Educom was a late entrant and still is quoted high with high p/e as well.....why?

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  9. Hi Rajeev,
    Can you pls express your thoughts on RNRL ?
    What's the actual scenario and what best can come out of this negotiations between RIL and RNRL if at all there is any little hope for RNRL.

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  10. Share,
    I think as of now RNRL should be avoided....the SC decision is negative on RNRL....perhaps Anil has to redifine terms with Mukesh....

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  11. RNRL at present only girl in boys hostel
    every trader make short and cover at lower everyday.
    some people say in past it is blue chip
    but
    in my views
    RNRL is always potato chips

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  12. Thanks for your reply Rajeev and ashok. At present I am struck in rnrl @67/-.

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  13. Rajeeviji, thanks for the clarification. I got the point and the concept clearly.

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  14. Hi Rajeev,
    Can you pls express your thoughts on SUZLON ?
    I'm accumulating it from Rs 88 and now it is Rs 58, How much it will go down?

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  15. Hi Mr.Khalid,
    Well, I never liked Suzlon.It came with IPO in Sep 2005 at Rs 450 and Citi gr and Chyrll cap make a killing in it...
    I think the FV was then at 10 and now it is 2..
    Now let me try to discuss the pros and cons...
    Why I didn't like the issue.It was highly priced at that time in 2005 when sensex was not at 21k.
    Now if we talk of present situation then , one can see that it is very hugly indebted Co due to its taking stake of German Co for wind turbines and blades.Doling out 181 cr as Interest ,every qr as big as half of eq makes no sense to me.
    Year or so back,its blade spiltted and the whole lot was returned back.I know Tanti is very motivated person and he can turn the corner, but with 2 paid , and 88 price ,we can say that it is Rs 440 for 10 paid up.
    It is making huge losses too.
    Now at Rs 400 one can get better value in our market instead of going for Suzlon.I know u asked about how much it will go down and this talk makes no sense to you, but I am writing it here so that next time when you invest,you look for all these I have written.
    Seems , you must have bought it for ST gains.But Mr Khalid, there is no ST profit in market.From WB to RJ all have made money holding stocks for LT and sitting on them patiently.
    I do not see any respite in near future.It is good on averaging stocks but those stocks which ofers value.

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  16. Good news and a positive news follows.....................

    DMC International Ltd has informed BSE that the board meeting which was scheduled to be held on May 21, 2010, to consider the proposed merger/amalgamation/acquisition of Quest Tutorials and was postponed later.

    In the same reference, the Board of Directors of the Company at its meeting held on June 02, 2010 approved the merger of Pragmatum Training Pvt. Ltd., New Delhi (Owner of Quest Tutorials, a leading IIT-JEE coaching brand), with the Company. Pragmatum is promoted by, Mr. Gaurav Mittal (IIT-Roorkee, IIM-Lucknow) and Mr. Praveen Tyagi (IIT-Roorkee, MS - University of Alabama, USA).

    The Company has decided to appoint M/s. Wahi & Gupta, Chartered Accountants, New Delhi, for the due diligence, valuation of companies and recommendation of the equity swap ratio.

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  17. I think Ace India is better than DMC.

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  18. hi Rajeev, do you track teledata...they are also venturing into education sector and stock has been beaten down like anything during last couple of years..any idea..

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  19. jj,
    I would not put a single rupee in Teledata...rest ur decision..

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  20. fine..I appreciate your opinion...just wondering if you can share 1-2 reasons for this..i know it might be asking for too much as i can see comments/questions on your blog flows like anything..so no probs if you couldnt answer..thanks again

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  21. jj,
    the reason I do not like Teledata is because the management is not reliable.Moreover they blotted the eq too much...see the eq...it is too high ...and I don't like high eq....may people has burnt fingres in Teledata....they boasted of big things that never fructified...and the most appropriate reason for me not to put money in Teledata would be, we have scores of others stocks going cheap, then why one would like to put money in such Co....?

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