| Manipal unit mulls IPO | |
| Kalpana Pathak / Mumbai October 14, 2009, 0:06 IST | |
Manipal Universal Learning (MUL), the corporate entity of Manipal Education Group — India’s largest private player in the higher education space — is mulling an initial public offering (IPO).
Confirming the development, Ranjan R Pai, MD and CEO, Manipal Education and Medical Group, said: “The IPO is some time away. But we haven’t decided on anything specific.” Sources familiar with the development, however, said that MUL could raise anywhere between Rs 500- and Rs 1000 crore.
MUL has a consolidated balance sheet size of Rs 2,000 crore and is the only formal education player to have received a sponsor fund of $30 million (around Rs 140 crore) from IDFC private equity and $40 million (around Rs 185 crore) from Capital International. MUL posted gross revenues of Rs 814.1 crore (Rs 395.5 crore from domestic operations and Rs 418.6 crore from international operations) for FY09.
Its domestic operations include its entities in the vocational segment — MeritTrac (MUL holds 88 per cent), distance education, corporation trainings, professional skills international centre for applied sciences and treasury income. On the international front, the group draws income from its four international campuses — American University of Antigua (100 per cent subsidiary), Manipal University Dubai (51 per cent subsidiary), Manipal College of Medical Sciences, Nepal (100 per cent subsidiary) and Melaka-Manipal Medical College, Malaysia (49 per cent associate).
MUL also holds 50 per cent in U21 Global, a Singapore-based online education company providing online MBA programmes.
MUL enjoys a strong brand equity in the higher education space through Manipal University (offers campus programmes with 18,000 students) and Sikkim Manipal University (offers distance education courses with 140,000 students).
MUL plans to grow through both the organic and inorganic route within higher education and vocational training space. “With the group having established its credibility over the last five decades with world-class institutions, it has a strong pricing power (a function of high quality courses) and students captive for three to six years,” stated a January 2009 IDFC-SSKI report, adding that “Manipal would require significant capital to add to or acquire capacities to sustain future growth”.
Experts from the field aver that when an educational service institution plans to get listed, it has to differentiate between its hard assets (real estate and infrastructure) and soft assets (intellectual property, curriculum and branding). Considering education institutions in India are registered as not-for-profit entities, they can look at listing options through subsidiaries.
“It is the soft assets that can determine value to the institution. The longer you are in the business the bigger value you can attribute to soft assets,” said a senior executive from a private equity firm.
Sources also said the Institute for Technology and Management (ITM) could go for an IPO in the next couple of years. ITM declined to comment on the issue.
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