Business Today

Teach and Earn

IL&FS Education is thriving, thanks to growing awareness about the need for computer education and skilling.
twitter-logo Sarika Malhotra        Print Edition: July 19, 2015
RCM Reddy, CEO and MD, IL&FS Education
RCM Reddy, CEO and MD, IL&FS Education (Photo: Shekhar Ghosh)

GROUP: SUBSIDIARIES/JVs
SEGMENT: REVENUES Rs 500-1,000 CRORE
Fastest Growing Emerging Companies Rank: 2

The institute is located in the heart of Delhi's largest industrial cluster, Okhla. Fittingly so, as it is an institute that imparts skills - some of the very skills the industries surrounding it require. It is one of 45 such institutes run across the country by IL&FS Skills, a unit of financial group IL&FS's social infrastructure arm, IL&FS Education and Technology Services. It runs them in conjunction with the National Skill Development Corporation (NSDC). The Okhla building - where around 1,000 students have been trained annually since 2012 - has been provided by a garments exporter, Akriti Apparels, and using it is part of IL&FS Skills' business strategy to remain asset light. "We try to leverage existing infrastructure by partnering with the government or private companies," says R.C.M. Reddy, CEO and Managing Director, IL&FS Education. "We believe the public-private-partnership (PPP) model is as relevant in building social infrastructure as in core infrastructure."

IL&FS Education began as Schoolnet in 1997, adding two subsidiaries, IL&FS Skills and IL&FS Clusters, in 2011 and 2006, respectively. Its success is mainly due to its early adoption of the PPP model in the social sector, as government budgetary allocations for education - especially computer education - and skilling began rising. Growing private sector awareness of the skilling lacuna and willingness to invest in overcoming it also helped. India Equity Partners took a 26 per cent stake in the company in 2010.

REVENUE:
Rs 629.91 crore

NET PROFIT:
Rs 28.32 crore

THREE-YEAR CAGR:
51.83%

THREE-YEAR AVERAGE TOPLINE GROWTH:
68.85%

A major PPP venture the company has entered into, for instance, is participation in the Ministry of Human Resource Development's Information, Communications and Technology programme for Schools, begun in 2010 in Gujarat. The service provider has to set up labs, train teachers, develop content, etc, for which the ministry pays it an agreed amount over five years. "We engaged every possible stakeholder and innovated at every step to create a mechanism that ensures success of the project," says Reddy. IL&FS's success led the governments of Bihar, West Bengal, Odisha, Maharashtra and Rajasthan to also seek its services. The company now runs the programme in 18,000 schools. Overall, it has a 27 per cent share in the edutech solutions market, which accounts for 66 per cent of its revenue.

IL&FS Skills, with its skilling institutes, brings in 20 per cent of the revenue. It imparts skills in 17 sectors - various kinds of manufacturing, engineering, construction, services, etc. "IL&FS is one of our top partners with a pan-India presence," says Dilip Chenoy, CEO and MD, NSDC. The company also trains people on behalf of corporate houses, charging Rs 5,000 to Rs 20,000 per trainee. More than 40 companies have tie-ups with IL&FS Skills to run skilling programmes. "We have built a brick-and-mortar network under which we can create niche programmes for corporate houses," says Reddy. While corporate houses pay 40 per cent of the fee, students pay the remaining amount. "If students are unable to pay, we have tie-ups with agencies for collateral-free loans," Reddy adds. "Or else they can be included as part of the CSR initiative of the company" Placement is a key area of success for IL&FS with more than 75 per cent placements. Some employers even pay a placement fee per trainee taken, which is used to offset the course fee the trainee paid. IL&FS Clusters, which brings in the remaining revenue, mainly provides consultancy for setting up and running industrial clusters, with governments - including 17 African governments - corporate houses and international agencies among its clients.

IL&FS Education & Technology Services aims to skill 4 million people by 2022. "In coming years, the thrust on education and skilling, by both the government and corporate houses, can only increase," says Reddy.

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