ISB plans to raise Rs 400cr corpus

B-school to raise amount in a decade's time

The Indian School of Business (ISB), the biggest business school in India, is making plans to raise a corpus of a whopping Rs 400 crore in a decade's time.

The leading business school, with an avowed aspiration of being one of the leading business schools in the world, is also planning to set up two more centres for excellence.

Speaking to Business Standard, ISB dean M Rammohan Rao said that the business school, which was set to increase the number of students to 400 next year from 320 this year, would ideally like to offer at least one-third of its student strength some form of scholarship. A full-year management programme at the ISB can cost up to Rs 15 lakh for a student.

"We would like to start a serious fund-raising initiative in the next 18 months. On a conservative estimate, we will probably raise about $10 million in the next two years. We would like some form of scholarship to be given to most students who come for programmes here and for that we need to raise money apart from using it to fund our research initiatives," Rao said. ISB recently saw its governing committee pledge another Rs 30 crore to fund its expansion plans.

ISB, which has in a relatively short span of three years become the biggest business school in India, will also set up two new centres of excellence. The business school already has centres of excellence dedicated to analytical finance and entrepreneurship.

"We want to set up a centre for leadership and change management and another one dealing with manufacturing, logistics and supply chain management," Rao said.

The centre dedicated to manufacturing, logistics and supply chain management will be set up in the next 12 months, while the centre focused on leadership and change management will be set up in about 24 months time.

According to Rao, there are plans to set dedicated centres of excellence for technology as well as a behaviourial lab for strategic marketing, though no time frame has yet been decided upon for the creation of these.

ISB is expected to achieve financial break even in the current financial year. According to sources in ISB, the school has recorded revenues between Rs 65 crore and Rs 70 crore for the last financial year ending March 31, 2004, which would represent a 60 per cent growth over the previous year.

ISB, which has invested close to Rs 220 crore in its campus on the outskirts of Hyderabad, is carrying an accumulated loss of Rs 30 crore in its books which is expected to be wiped off in the next three years.

ISB has, according to sources, from time to time swapped high cost debt with fresh borrowings from the market at sub-prime lending rates. ISB has been carrying the same quantum of debt on its balance sheet since March 2003 and has managed to reduce the average cost of funds to around nine per cent.

This apart, ISB has started to focus on the 'executive education' segment as a revenue driver in the coming years. The school has according to sources seen revenues from its executive education programme go up and touch close to Rs 25 crore for the last financial year ending March 31, 2004.