Facing a liquidity crunch, Manipal University is likely to reconsider its expansion plans, a senior official with the group has said.
Manipal Education Group, which runs the Manipal University, had plans to invest over Rs 150 crore to set up an engineering college in Rajasthan. The project has been been postponed indefinitely for the moment.
The University also plans to set up a self-financed, Rs 600-crore Persons of Indian Origin (PIO) University in Bangalore by 2011-12. It has acquired 100 acres of land for this purpose and another 100 acres need to be acquired. “We have postponed few of our expansion plans. The need of the hour is to consolidate our position,” the official added.
Manipal Universal Learning (MUL) is the corporate entity of the Manipal Education Group which runs Manipal University — offering campus programmes — and Sikkim Manipal University — offering distance education programmes.
The group has executed some ambitious plans in the past two years growing and has grown thorugh both organic and inorganic routes. While its India operations contribute 49 per cent to its revenues, its international higher education business dominates the top line.
A January 2009 research report of IDFC-SSKI states that MUL has gross revenues of Rs 814 crore with domestic operations contributing around Rs 395 crore and international operations (revenues primarily from four institutes in Nepal, Dubai, Antigua and Malaysia), contributing Rs 418 crore.
Though Anand Sudarshan, CEO and MD, Manipal Education agreed that due to the economic slowdown, project schedules would be longer, he said, the group has not put any projects on hold. “Manipal has certainly infused a higher level of caution in projects that need capital expenditure. Financing has definitely become scarcer and costlier. But we are in a comfortable position in this regard,” he said.
Manipal University’s international plans include building its own campus in Dubai. The institute opened its branch in Dubai in September 2003. Manipal says it has been operating out of rented premises, which is becoming unviable due to high rental and was thus looking at construction of its own campus. While the senior official informed Business Standard that the plan has now been postponed, Sudarshan said that the campus is on schedule for 2010.
In December 2008, Manipal acquired the entire shareholding of American University of Antigua (AUA) from New York-based Greater Caribbean Learning Resources.
AUA, has over a 1,000 students on campus. The number will go up to 2,500 after Manipal builds a new campus in the next one year, which, according to sources, has been postponed for the moment. Sudarshan however, said that Antigua campus is on target.
So far, AUA contributes around Rs 155 crore to the group’s kitty.
The University’s trust funds its few ventures, and was also looking at raising money through financial institutional investors (FIIs).
“We acquired AUA which has cost us a lot of money. We were planning to raise money through FIIs but in this market, it has all dried up,” the senior official added. He however, did not give any details of the amount the group planned to raise.
In the past two years, Manipal has acquired U21 Global, an online varsity, and MeritTrac, a skills assessment and testing firm. While U21 Global contributes around Rs 27 crore to its revenue, MeritTrac adds around Rs 52 crore. MUL is the only formal education player to have received sponsor-funding ($30m from IDFC Private Equity and $40m from Capital) so far.
