Education can be paying too, the Manipal group way

Indian laws require institutions offering higher education to be run as non-profit ventures.

Yet, the business has high profit potential and attracts private equity investors by the droves. How to marry the two? The Manipal group, one of the largest domestic players in higher education, seems to have some innovative ideas.

Manipal Global Education Services, the for-profit arm of the Manipal group, notched up $250 million in revenues with healthy profits in the latest fiscal.

It counts private equity firms such as Premji Foundation, Catamaran Investments and IDFC among its investors.

It has three facets to its business model.

The first is running educational institutions outside India.

S. Vaitheeswaran, Managing Director and CEO of the group, talks of the medical school in the Caribbean islands, which churns out doctors for the US.

“There is an acute shortage of doctors in the US. In the next five years, the country will need 1,50,000 doctors. Setting up a medical school in the US is expensive. So, we run a campus in Antigua for students who cannot make it within the US,” he says. Students complete their basic science courses at the Antigua campus and go on to do their clinical rotations in the US.

This model has also been tried and tested in Malaysia earlier, where one in every four doctor is a Manipal alumnus.

A full-fledged university in Dubai and a medical school under Kathmandu University complete Manipal’s global suite of institutions.

These global campuses, Vaitheeswaran says, bring in 55 per cent of Manipal Global’s revenues, with the rest coming from India.

Real-life banking

The second aspect of Manipal’s for-profit business is corporate training.

The group’s Bangalore facility, for instance, trains all the probationary officers recruited by ICICI Bank, to make them job-ready.

“We simulate real-life banking operations to give the new employees a feel of actual branch work. Everything in this training centre from the colours and the software, Finacle access, is similar to what they would experience in the bank,” says Vaitheeswaran.

Manipal Global started this experiment with 60 trainees from ICICI Bank three years ago.

Today, it has 4,500 trainees and has worked with 12 banks. Plans are afoot to expand the training business into other domains such as IT and healthcare.

‘Examining’ new hires

Then, there is Merit Trac — an assessment and certification company acquired by Manipal Global.

“If you are Cognizant and want to hire 20,000 people this year, you can ask Merit Trac to conduct an examination to shortlist these candidates. It has the largest question bank in India. It grades, marks and summarises the information for clients,” says Vaitheeswaran.

This business has high potential, too, with hiring by services companies on the rise.

The higher education arm of the Manipal group is run through a Trust structure, 21 institutes catering to over 30,000 students.

This is a not-for-profit venture which ploughs back its profits into the respective institutions.

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