Jain Group of Institutions, among the large privately-held education institutions with a major presence in Karnataka straddling pre-school to post-graduate courses as well as vocational education, is looking to raise around Rs 150 crore through the private equity route to expand its K-12 schooling vertical.
It is understood that there are advanced discussions with at least two India-focussed private equity funds and there is a distinct possibility of the deal getting to closure stages within the next quarter.
The JGI Group represents a cluster of 75 educational establishments. In 23 years, the group has grown to serve over 45,000 students and 4,500 staff members engaged at the P-12, undergraduate and post-graduate levels across 53 campuses and centres of excellence.
The Jain Group of Institutions has been one of the aggressively-growing educational institutions in Karnataka and in the past nearly two decades of its operations, it has risen to become a sought-after institution here. While the group is pretty well established in the under-graduate and the post-graduate streams, the schooling stream which the group likes to term P-12 (pre-kg to 12th standard) has been over the past few years expanding aggressively.
The group presently has around 36 schools mostly through the franchisee route, while it is understood to own around six of them. It is this number which the Jain Group of Institutions is looking to expand aggressively with the infusion of private equity. The management of Jain Group of Institutions could not be reached for comments.
The private equity interest in the education sector has been pretty high over the past year. However, in the first quarter of 2013, there were investments worth $22 million across two deals compared to $36 million across six deals in the first quarter of 2012. The last quarter of 2012 saw a sharp spike in the number of deals in this sector, to $75 million across nine deals, according to data from PwC.
Some of the notable PE deals in the education space include CLSA's $22 million investment in Resonance Eduventures, Gaja Capital investment in Career Launcher, Aditya Birla's PE fund investment in Tree House and Lok Capital backing Hippocampus Learning Centres and New Silk Route backing AP-based Chaitanya Schools.
According to analyst firm India Ratings, the education sector's market size will increase to $111.16 billion by FY15 due to the expected strong demand for quality education. The sector grew at a compounded annual growth rate of 16.5 per cent during FY05-FY12. According to consulting firm Technopak, enrollments in Kindergarten-12th grade (K-12) will grow to 351 million, requiring an additional 34 million seats by 2018.
