CL Educate IPO

CL Educate Ltd is a diversified and integrated technology-enabled provider of education products, services, content and infrastructure, with a presence across the education value chain. The company offers test preparation courses and services under the Career Launcher brand, publishing and content development services under the brand GK Publications and event management, marketing support, customer engagement, and managed manpower and training services under the Kestone brand name. They have diversified their operations across six business segments, spanning the education value chain viz. Test preparation and training, Publishing and content development, Integrated Business, marketing and sales services for corporates, vocational training, integrated solutions to educational institutions, K-12 schools etc.

Issue Details
 

 

 

Objects of the issue

 

 

 

 

 

 

1) Funding working capital requirement of their company and their subsidiaries, GKP & Kestone;

2) Pre-payment of outstanding amount of a debt facility availed by their subsidiary, CLIP;and

3) Acquisitions and other strategic initiatives

Issue Size Rs. 238.95 Cr 
Face value  

Rs. 10 Per Equity Share

Issue Price  

Rs. 500 – 502 Per Share

Bid Lot  

29 Shares

Listing at  

NSE, BSE

Issue Opens:  

Mar 20, 2017 – Mar 22, 2017

 

 

QIB

 

50% of Net Issue Offer

NIB  

15% of Net Issue Offer

 

Retail 35% of Net Issue Offer

cl educate ltd total revenueStrengths:

  • Diversified and integrated education products, services, content and infrastructure provider, with pan-India presence and a focus on knowledge-creation.
  • Strong brand equity and Track record of successful inorganic expansion;
  • Professionally qualified, experienced and entrepreneurial management team, and quality human capital.

 

shareholding - cl educate ltd

Key Highlights:

  • The company has generated total revenue of Rs 296.68 crore for year March 2016 vs Rs 285.07 crore in year March 2015.Revenue for the six months ended September 2016 was Rs 160.69 Cr.
  • CLE has recorded profit of Rs 21.67 Cr in FY16 vs Rs 21.23 Cr in FY15. The profit for six months ended September 2016 was Rs 12.91 Cr.

 

 

Risk Factors:

  • CLE’s growth strategies are subject to execution risks that may affect their business, results of operations and prospects.
  • A significant portion of CLE’s operating revenues is derived from their test prep business. Failure to attract students in their test prep business, including due to an unsatisfactory success ratio, may adversely affect their revenues, business, results of operations and prospects.

Outlook:

CL Educate Ltd is a diversified and integrated technology-enabled provider of education products and services.As on September 30, 2016, they had a network of 151 test prep centers in 87 cities across India, with 45 owned test prep centers (of which three were temporary Smart Career Centers) and 106 test prep centers operating under a partnership model, while as on March 31, 2016, they had a network of over 158 test prep centers in 87 cities across India, with 51 owned test prep centers (of which four were temporary Smart Career Centers) and 107 test prep centers operated under a partnership model. In addition, they currently have 4 owned test prep centers in the UAE. Under their brand GK Publications, CLE publish niche test prep titles for popular professional and entrance examinations in India, including for Engineering, GATE, Civil Services and Banking and SCC entrances.

On the performance front, CT Educate has reported EPS of Rs 15.30(Post Offer)in FY16. At the asking price the PE works out to be 32 plus, which is looks prices compares to the listed peers. Also the industry is too much sensitive in any changes, like the pattern changes.

Hence, we recommend only aggressive investors to subscribe the issue.


DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more


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