Seema Jhingan, Partner, LexCounsel Law Offices, New Delhi
There are lots of challenges in finding investors in education. In India, education is considered as a non-profit making sector. For profit entities like partners firm, cooperatives, private limited companies, investments is not a challenge. But with education, which is formed under entities like societies, trusts and Section 25 companies, finding investor is a real challenge. Investor or VC funds cannot invest in trust or society because they cannot reap benefits out of them.
Naveen Jha, CEO, Deshpande Foundation; and Managing Trustee, Deshpande Education Trust; President-TiE-Hubli
Most of the companies think that investment happens on top line. The new set of investment that is happening in the country, which is particularly in education is happening on PACT (Profit After Tax). Even if you have `1 pact there are investors who are ready to give you 20 times of that. But if you have a top line of 50 crores and you are not profitable means the execution is a big problem inside the company and we as Indians are far better in giving ideas, chalking out strategies, but lack in the execution side. If you are running a company, or a business and, if you have `1 of profit, it is more valuable than `100 of top line.
Ujjawal Singh, Partner, Indus Balaji
I think private players like us are looking to invest in innovations so that we can play a meaningful role in the education sector. For instance, we support an organisation called ‘Agastya’ that designs low-cost science equipment. So here is a huge opportunity lying in the philanthropy and innovation format that can be used to supplement the education system. Various sectors require very specific skills. I think India’s demographic dividend has to be converted into human capital else it will become a liability.
Melwin Braggs, Business Lead, Develop Schools
India’s private education market is estimated to reach USD 103 billion from USD 71 billion currently. New models of PPP in the skill development sector are assisting the vocational education sector. We see expansion in education with participation of private and foreign players. For that, the sector should be turned into for profit. Government can allow long-term lease on land and infrastructure. It may cap profitability, but allow a rate of return to the investor.