Now, she has to contend with corporatised business of coaching classes / tutorials that cover not only school and college examinations but competitive tests for a range of educational courses and jobs.
There was a time when word-of-mouth about private tuitions for school kids was enough to generate secondary income for neighbourhood Aunty. Now, she has to contend with corporatised business of coaching classes / tutorials that cover not only school and college examinations but competitive tests for a range of educational courses and jobs.
After all, organised tutorials are now a $ 5 billion (Rs 27,420 crore) business. Experts say the overall coaching classes business is highly fragmented with several unorganised players. “This makes consolidation the need of the hour,” said Arks Srinivas, CEO of VistaMind, an MBA entrance exam firm.
Welcome to the age of ‘knowledge is money’ where partnerships, buyouts and countrywide alliances are the norm, providing not just easy access to remote areas but direct entry into new exam spaces.
For instance, last week, Mumbai-based MT Educare, a well-known, listed coaching institute for school and board exams, entered the IIT and medical entrance exams space by buying a 51% stake in Punjab-based Lakshya Forum.
Mahesh Shetty, CMD of MT Educare, said this acquisition will broaden the company’s science offering as well as reach.
Agreed Pramod Maheshwari, MD of Kota, Rajasthan-based Career Point Infosystems, an institute tutorial specialising in IIT-JEE and pre-medical entrance exam coaching. “Local partners are already well-versed with the complexities of a region, including people’s payment capacity, income levels and career choices. That proves a big help indeed.”
MT, it seems, emulated Career Point and CL Educate, an MBA and engineering entrance coaching firm that expanded into law exams by acquiring Law School Tutorials.
Satya Narayanan, founder and chairman of CL Educate, said getting into a new segment requires competence in the area concerned. “It works out better through some inorganic moves rather than expanding organically.”
According to Narayan Ramaswamy, head of education practice at KPMG India, tutorial classes are a local or region-specific activity with a large presence in Tier II and Tier III cities. “Established players in Tier I cities won’t mind paying a certain premium to build scale in unexplored markets.”
More so because some exams (like bank clerical tests) have gone online, requiring methodical, rigorous practice that only major tutorials with their technological infrastructure can provide, leaving small local coaching schools easy buyout targets, said Narayanan.
If not outright acquisitions, larger firms buy partial stakes and provide smaller partners with web support, test and study material, said Srinivas.
Then there is the option of franchises and direct expansion via branches. “We will look for opportunities in south and west where we currently do not have much presence,” said Maheshwari.
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