The rules of the game is simple, upgrade or perish. There are major drivers vehemently favoring this change like:
1) 20-25% rise in middle class income(taking the last decade as the base year)
2) avg. indian family is ready to invest 9% of income in education and it may increase in future.
3) demand of skilled labors in the global market. etc.
Amidst all these, could be seen a brusque but deep investment opportunity.
Lets take it this way. Many of our oldest universities like BHU, Osmania, DU,etc. have immense real-estate holding. Only BHU has more than 4000 acres land(including both the campuses), and Osmania has 1600 acres of land under it, a handsome part of which is not optimally used. Government is also in a spree to allocate lands to the private universities in the interior parts of the nation or the exterior skirts of the major cities. This is applicable to foreign universities as well. If seen collectively, the valuation of these institutions could run into millions of dollars considering the methodology used by any private equity firm. The valuation may also vary with the Brand. Brand equity allows us to monetize the brand value and add it to the total valuation of the company. this means black horse institutes not only can charge premium but also can be valued premium.
The establishment of the bill will ensure proper competition required and the accountability sought from this sector.This along with the growth drivers should ensure positive returns in this sector(off course government subsidies are included as earnings for public universities).
The major challenge ahead is to convince these institutes to come up with IPOs and listing and also lobby government to dilute the policy norms applicable to this sector. So, the game commands marketing to play a bigger than expected role to play as spreading awareness and setting the pitch are the most intense variables on which the success relies upon.
To conclude, there can't be anything better than investing in a sector wherein we can hope that our money will help us to grow as a knowledge driven society and also will earn handsome return for us.
So lets welcome this..........
and what about the student population running into millions who wouldn't be able to meet the ever rising cost of education?and do u think it is justified that the education institutes should be allowed to raise money from the public(expecting returns) for a cause(educating the masses)which for long was considered a non-profit social cause?
ReplyDeleteThe fees that u r talking about will stabilize not rise once a transparent system is established. Gone are the days when education is considered as cost or expense, it is also an investment today. I talked about professing of norms by government also, which means greater accountability from the part of institutions in terms of scaling the fees for education.
ReplyDeleteAs per raising of capital is concerned, education is not mandatarily a sec-25 institute. Sectors like power and infrastructure development are also for social development sectors under government but are listed. many run into loss but are traded heavily. raising capital from public will make the system more mobile and transparent. Expecting returns will be ensuring its perpetuation. Do we understand that the current education sector is lagging behind the global standards??? if social cause is the issue then, such bills should not be passed. My point is validated only when a bill of this kind is passed. it is undoubtedly a potential sector and can grow without exploitation of students also. The concern is its logistical and legal developments. According to me, manifestations are healthy and increase in competition among the universities will not only stabilise the price but also will offload the ever increasing cut throat competition that students of this nation faces day in and day out.