A churning is taking place in the INR 400 common admission test (CAT) training business is in a consolidation mode. The number of applicants for the CAT examination has been decreasing steadily, after the MBA entrance went computer-based last year and institutes feel the cost of setting up a computer lab at each centre too high. It is expected that the next two years would see smaller institutes being acquired by bigger players. CAT scores are considered for admission to 10 Indian Institutes of Management (IIMs) and 150 B-Schools. More than one lakh candidates take coaching to prepare for the test. With a computer-based test requiring coaching centres to install computers and develop software support, the new investment could be as high as INR 1 crore. With competition prohibiting raising of fees (INR 35,000 for an 18-month course), institutes prefer to close down some centres.
CAT training institutes like IMS and PT Education, which have a national presence, have together closed down some 35 centres in prominent cities like Delhi, Pune, Satara, Kolhapur, Muzzafarpur, Gwalior, Surat, Ajmer and Lucknow. Smaller institutes like Ahmedabad-based Navigator Solutions has stopped CAT coaching and switched over to government and banking competitive exam coaching. A few more are closing down smaller centres. The drop in the number of applicants is also being attributed to lack of comfort with computers of the applicants from rural background.