New chapter in the Indian publishing industry
S Chand & Company Ltd has become the second education content company to be listed in India, with its Rs 728.5 crore IPO oversubscribed 60 times. The group caters to 38,000 schools along with recent acquisition of Chhaya Prakashani catering to 30 million students. With the fresh boost in investment, the group will be now targeting 50,000 schools and 40 million students. The company is all set to consolidate its position in Central Board affiliated schools and increase penetration in State Board affiliated schools.
S Chand Group has made news again. The initial public offering of S Chand & Company was oversubscribed 60 times, according to data from the BSE and the National Stock Exchange. The Rs 728.5 crore IPO got bids for 45,72,01,910 shares against a total issue size of 76,85,284 shares, for a price band of Rs 660 to Rs 670 a share. The reserve portion for qualified institutional buyers (QIBs) was oversubscribed 45 times while that set aside for retail investors was oversubscribed about six times.
What IPO means to the S Chand Group?
The group plans to repay loans worth Rs 255 crore from its IPO that would reduce its debt burden. The repayment will partially include the loans it had taken to acquire publishing firm Chhaya Prakashani. As per Himanshu Gupta, managing director S Chand & Company, “From the fresh issue, the company will raise Rs 325 crore, of which Rs 255 crore would be used to pay the debt which will be around 75 per cent debt reduction in the company. While the remaining funds would be used for general corporate purposes and IPO expenses.”
With this, S Chand becomes the second education content company to get listed in India after Navneet Education (formerly Navneet Publications).
Organic and inorganic growth
The company is poised to grow exponentially, with both organic and inorganic growth. The recent acquisition of Chhaya Prakashani Pvt Ltd will aid the group to foray into East India and mark its presence in state board affiliated schools as Chhaya has a very strong presence in state board (West Bengal) affiliated schools. The company has acquired 74% equity ownership of Chhaya Prakashani in December 2016. The acquisition is in line with S Chand’s strategy of inorganic growth.
The company has also been at the forefront of innovative education delivery through focused digital/services platform. They have 7,700+ hours of e-content. Digital companies under its wings include online test prep platforms Test book & Online Tyari; flipclass marketplace which connects students with tutors; Edutor Technologies for mobile and touchscreen learning and Smartivity activity based learning for young children. It is estimated that the online test prep market in US$50 m, which is growing at a CAGR of 30%, while online home tutoring is worth $3.5 m, growing at a CAGR of 30%. Thus, there is huge opportunity to grow in these segments.
The group credentials
S Chand Group is the oldest and one of the largest publishing and education service enterprise with footprints across the nation with 50 branch offices, exporting to 19 countries, 12,000 titles and 2000 authors reaching out to 30 million students across 38,000 school & educational institutions, state-of-the-art printing and publishing facilities and 3000+ employees. Sixty-seven titles have sold more than 50,000 copies in FY 2016. With 5,607 distributors, their Pan India reach has presence in CBSE, ICSE and state board affiliated schools across India and has sold 45 million books in 2016.
“The company will continue to grow and whenever there are strategic and financially fit acquisitions, we will look at new acquisitions,” concludes Himanshu.