Veranda Learning IPO: Veranda Learning Initial Public Offering (IPO) is all set to hit the market tomorrow. It will be interesting to see investors’ response to the initial share sale of Veranda Learning Solutions Limited, which offers online and offline coaching services on UPSE, banking, government services and jobs examinations. The subscription process for Veranda Learning IPO will commence on March 29 and it will culminate on March 31. This would be the second initial public offering (IPO) getting launched in the current month.
Veranda IPO Price Band
Before filing the red herring prospectus, Veranda Learning raised Rs 40 crore by issuing 30.8 lakh equity through a private placement to the public category. The learning solutions provider is planning to raise Rs 200 crore through the public issue that will close on March 31. The company has fixed a price band at Rs 130-137 per share.
Veranda IPO: Reserved Portions
According to the red herring prospectus, up to 75 per cent of the total offer is reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional bidders (NIIs), and the remaining 10 per cent for retail investors. The promoters of the company are Kalpathi S. Aghoram, Kalpathi S. Ganesh, and Kalpathi S. Suresh.
Veranda IPO: Investment Rationale
Through this funding, the company intends to repay or pre-pay, in part or full of all or certain borrowings up to Rs 60 crore. It will use Rs 25.19 crore towards payment of acquisition of Edureka and about Rs 50 crore towards growth initiatives. There are no listed companies in India that engage in a business similar to that of Veranda Learning Solutions.
In its red herring prospectus report, Veranda highlighted that the education sector has been growing at a CAGR of 14 per cent over the past decade, due to India’s demographic profile, rapid urbanization, increased educational spend, lack of premium educational institutions, highly competitive market, and low penetration of education.
Furthermore, Veranda pointed out that India’s urban population is growing at 2.3 per cent p.a., as compared to India’s overall population growth rate of 1.0 per cent. Urban areas offer better job opportunities and higher wages, while providing better access to quality education. Accordingly, increased urbanization will also result in higher spending on education. India’s growing prosperity and rising disposable income has seen increased spending by households on education.
Veranda Learning IPO: Financials
“During the period FY08-FY14, average spending on education per student in rural areas increased at a CAGR of 19.4 per cent, whereas in urban areas, it increased at a CAGR of 16.6 per cent. Due to demonetization, the growth was affected and between FY14-FY18, average spending on education per student in rural areas increased at a CAGR of 4.0 per cent, while in urban areas, it increased at a CAGR of 6.0 per cent only. IRR Advisory expects average education spend per student to increase from Rs 8,300 in FY18 to Rs 17K in FY25,” Axis Securities said in its note.
Veranda Learning IPO: About the Company
Veranda Learning Solutions Limited was incorporated on November 20, 2018. Veranda is engaged in the business of offering diversified and integrated learning solutions in online, offline hybrid and offline blended formats to students, aspirants, and graduates, professionals and corporate employees
enrolled with their courses through a multitude of career-defining competitive exams, professional courses, exam-oriented courses, short-term up-skilling and re-skilling courses.
Veranda provides comprehensive long-term and short-term preparatory courses in a simple and lucid manner for Students preparing for UPSC Exams, State Public Service Commission, Staff Selection Commission, Banking, Insurance, Railways and Chartered Accountancy. The Chennai-based company has 4 business Verticals viz. Veranda Race, Veranda CA, Veranda IAS and Edureka. It primarily provides its services through online, offline hybrid and offline blended learning models.
Read all the Latest Business News and Breaking News here
Comments
0 comment