The Hindu Business Line : Educomp plans IPO

EDUCOMP Solutions Ltd is set to become the first school-segment education solutions company to be listed on the bourses. Educomp, which was incorporated in 1994 and has been aggressive in the K-12 (Kindergarten to Class 12) segment, is planning a public offering this month to raise funds to expand its overseas and domestic presence.

The company is looking to plough proceeds from the IPO in three areas. The first would be an overseas acquisition to provide a fillip to its technology-driven `smart class' learning programme and online mentoring business in the US school education market.

The second would be increased spending on education content development for the US and South-East Asian market, and the third would be an expansion of its domestic education business.

The company specialises in research into new modes of learning and developing applications and products that leverage information technology and the Internet to make the school education system more effective.

Over the next year, Educomp plans to expand its global business with a focus on North America. It would also be building on its existing initiatives in providing digital content for schools as well as online tutoring in the US, which is the world's largest education market, with a K-12 content spend of over $10.2 billion (2004 figures) and an online tutoring market spend of over $4 billion.

On the domestic front, Educomp has been aiding the Government with digital divide initiatives and involved with professional development of teachers and turnkey solutions for both private and Government schools.

It is looking to capture a slice of the potential market which includes a Government market spend of approximately Rs 1,200 crore on digital divide initiatives and private initiatives estimated at around Rs 2,200 crore.

Currently, it has on-going partnerships with Microsoft, Wipro, Intel and Worldlinks for their training programmes and has trained over 240, 000 teachers.

In October 2000, the company received $2.5 million funding from the Carlyle Group, a US-based private equity firm. However, a few months ahead of the IPO the promoters have bought back the stake. Last fiscal, it clocked a turnover of Rs 32 crore.

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