Tree House Education rallies on huge volumes

Tree House Education & Accessories has rallied 7% to Rs 180 on back of huge volumes. As many as a combined 7.86 million equity shares have changed hands on the counter till 1304 hours against an average around 1.4 million shares were traded daily in past two weeks.

The stock has rallied 31% in past one week after the company reported a net profit of Rs 5.22 crore on back of operational income of Rs 16.26 crore for the quarter ended June 2011. The company had recorded a net profit of Rs 9.19 crore for entire previous fiscal ended March 2011.

An educational service provider had raised Rs 122 crore by issuing 8.4 million shares through initial public offer (IPO) in August 2011. The company had priced the IPO at Rs 135, a lower price band of Rs 135-153 per share to qualified institutional investors and high net-worth individuals and at a price of Rs 129 per share for retail investors.

It intends to utilise the issue proceeds for expansion of pre-school business; acquisition of office space; procurement of exclusivity rights to provide educational services; construction of infrastructure for educational complexes in Rajasthan and Gujarat; and repayment of loan.

Last month, the company signed up 7 new centers, 6 in Mumbai and 1 in Nagpur, taking the total number of preschools upto 230 as on August 26, 2011.