HDFC picks up stake in Indus World Schools

Leading mortgage provider Housing Development Finance Corporation (HDFC) has entered the booming Indian education sector by picking up a stake in Indus World Schools (IWS), which is promoted by education company Career Launcher (CL). Private equity firm Gaja Capital Partners, which invested $8.5 million (around Rs 40 crore) in IWS in 2007, is a co-investor.

IWS Chairman, Satya Narayanan, said HDFC had picked up a minority stake. He declined to disclose the exact stake or investment, saying there was a confidentiality clause. According to industry sources, the investment could be to the tune of Rs 50 crore.

Narayanan told Business Standard that the amount raised would be used to fund expansion plans. IWS, which currently runs 10 schools, is planning to grow into a 75-80 school chain over the next five years. Narayanan said a part of the amount would be used to improve education in public schools. IWS runs schools for the underprivileged in rural Andhra Pradesh, Punjab and Gujarat through partnerships with the state governments.

“HDFC and CL have a lot to gain from this relationship, and together they can make a significant positive impact on the quality of school education in the country”, HDFC Managing Director, Renu Sud Karnad, stated in a press release here on Tuesday.

IWS had opened its first school in Hyderabad in 2005. Today, its schools are spread across Indore, Gurgaon, Mandi, Raipur, Aurangabad, Ahmednagar, Jalgoan and Bhiwani.