Educomp stocks nosedive after income tax raids

The stocks of Educomp, an education services solutions provider, took a beating on the bourses on Thursday following reports that the Income Tax (I-T) department conducted Rs search and surveys’ on its premises.

The company’s shares plunged over 13 per cent in intra-day trade hitting its 52-week low at Rs 221. The shares closed at Rs 234.35, down 8.9 per cent from yesterday’s closing price.

A senior I-T department official told Business Standard that searches were conducted on three premises and surveys were carried out on 11 premises of the company located in the Delhi-National Capital Region. The exercise was carried on three Educomp entities, including Educomp Infrastructure and School Management Ltd (EISML), a subsidiary of Educomp Solutions Ltd. The I-T official, however, declined to give any further details. When contacted, Educomp management termed these as “routine exercise.”

“Income-Tax Department is conducting a search at the office of Educomp Solutions Ltd. The company is given to understand that this is a routine verification of records. We have full faith in the departmental procedural diligence and we are cooperating fully with the authorities,” the company said in a statement.

Founded in 1994, Educomp Solutions is a diversified education solutions provider. The company serves more than 15 million learners and educators across India, the US and Singapore. The company has an employee base of over 10,000 professionals (including contractual employees with various state governments).

The company operates through its various subsidiaries including AuthorGen, Threebrix eServices, Learning.com, USA, AsknLearn Pte Ltd, Singapore and via its associates such as Savvica Inc.