Everonn to raise $50 million more for expansion

ICT education major Everonn Systems plans to raise additional funding of $50 million to carry forward its expansion plans on the virtual classrooms or 'iSchool' segment of its business.

Not ruling out various fund-raising possibilities like foreign currency convertible bonds, preferential share allotments or a Qualified Institutional Placement to raise the additional capex, R Kannan, director, Everonn Systems, said the funds would be utilized to expand the company's educational content and services to private and government schools, colleges and corporates.

"We have not taken a final decision on the mode of fund-raising," said Kannan. "But it will primarily be absorbed in widening the reach of our key ViTELS (Virtual Technology Enabled Learning Solutions) business vertical by setting up eight new professional and vocational centres of excellence all over India over the next 12 to 18 months."

Chennai-based company has specialized in offering the 'smart classroom' or virtual classroom concept to schools. It sees strong prospects for this segment of the education market, given the government's drive to increase the pace of computerization in India's public schools.

Everonn is now rebranding the concept as 'iSchool' as part of realizing greater market reach and penetration for the popular educational paradigm the company has successfully evolved.

Everonn operates across two broad business verticals - IEIS and ViTELs. IEIS caters to computer education needs (ICT) in government schools, while ViTELS provides IT-enabled educational content and services to private schools, colleges, and corporate entities.

Everonn currently has a presence in over 3,000 schools via ICT contracts in nine states. "The 'smart classroom' concept has emerged as our major revenue earner, and presently over 18,000 students are undergoing training under the 'iSchool' concept. We are looking at a pan-India presence and aiming to add 4,000 schools to our rollcall every fiscal," Kannan said.

The ViTELS segment brought in 31 per cent of Everonn's revenues in fiscal 2007 and is expected to contribute 45 per cent by fiscal 2012. The company recently acquired Aban Informatics (P) Ltd to enhance its prospects in the ViTELS segment.

A direct competitor is Educomp which has a presence in over 6,000 schools, and offers its 'SmartClass' product as a strong contender to Everonn's growing presence.

Everonn had raised Rs 50 crore via its initial public offering in July last year. Having spent over Rs 35 crore of the IPO proceeds on expansion of operations, the company presently has Rs 15 crore cash in hand.

The new funds will enable further growth prospects and profitability, Kannan said, adding that Everonn expects to finish fiscal 2008 with revenues in excess of Rs 80 crore and bottomline of Rs 10.8 crore.

Around 45,000 schools currently come under the government's ICT program, and another 29,000 fresh ICT tenders are expected to be launched during 2008-09.

According to research firm Jefferies and Company Inc, Educomp leads the ICT education market with 14 per cent market share, followed by Everonn and NIIT with 7 per cent and 6.7 per cent respectively.