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EVERONN
OUTPERFORMER (RS500, MCAP: RS9.5BN / US$211M)
• VITELS – picking up momentum: VITELS had in its fold 1195 schools, 1812 colleges and 54 retail centres as of end-
Q2FY11. In schools, while new additions are being done at an average of four classrooms per school, Everonn (EEDU)
is also adding classrooms in existing schools. Thus the average number of classrooms per school is witnessing an
uptrend and now stands at 2.5 against 2.2 in Q1FY11.
• ICT – cherry-picking contracts: With the ICT segment yielding sub-optimal profits on the back of LI bidding as also
high debtor days, the management has been cautious in bidding for contracts. Selective bids by the management have
helped maintain EBITDA margins at 40-45% in the segment.
• Entry into K-12 and HE: The management is building its capabilities and tie-ups in its more recent initiative –
‘Educating India’. The initiative marks EEDU’s foray in the K-12 and higher education segments as ‘facilitator,
aggregator and manager’. While EEDU does not plan to own any institutes, it expects to get 7% of the total project
cost in addition to a management fee for managing the institutions. EEDU is looking to start 6-7 B-schools (under the
brand GSB – Global School of Business) and 10 K-12 schools in the next academic year (under the brand KenBridge
schools). A model B-school in Chennai is currently under operation.
• SKIL categorized as a co-promoter: In October 2010, SKIL was categorized as co-promoter in EEDU, which issued 4m
optionally convertible debentures to SKIL at Rs520 per share. This triggered an open offer of Rs587 per share, which
was completed on 27 November 2010 and led to SKIL acquiring 88,500 shares in EEDU. The deal between EEDU and
SKIL was so structured that post the open offer SKIL’s equity holding in the company would be lower than that of the
exiting promoter, P Kishore. As part of this agreement, EEDU has now issued 3.91m shares to SKIL and redeemed the
remaining OCDs (value of Rs46m). Post this transaction, SKIL’s stake in the company stands at 21.02% and the
existing promoter group’s holding has come down to 21.4% (from 26.9% earlier).
• Creating a strong Board: EEDU has inducted key industry veterans on its Board, including Tata Group veteran J J
Irani and Dr M S Vijay Kumar, senior associate dean at the Massachusetts Institute of Technology.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
EVERONN
OUTPERFORMER (RS500, MCAP: RS9.5BN / US$211M)
• VITELS – picking up momentum: VITELS had in its fold 1195 schools, 1812 colleges and 54 retail centres as of end-
Q2FY11. In schools, while new additions are being done at an average of four classrooms per school, Everonn (EEDU)
is also adding classrooms in existing schools. Thus the average number of classrooms per school is witnessing an
uptrend and now stands at 2.5 against 2.2 in Q1FY11.
• ICT – cherry-picking contracts: With the ICT segment yielding sub-optimal profits on the back of LI bidding as also
high debtor days, the management has been cautious in bidding for contracts. Selective bids by the management have
helped maintain EBITDA margins at 40-45% in the segment.
• Entry into K-12 and HE: The management is building its capabilities and tie-ups in its more recent initiative –
‘Educating India’. The initiative marks EEDU’s foray in the K-12 and higher education segments as ‘facilitator,
aggregator and manager’. While EEDU does not plan to own any institutes, it expects to get 7% of the total project
cost in addition to a management fee for managing the institutions. EEDU is looking to start 6-7 B-schools (under the
brand GSB – Global School of Business) and 10 K-12 schools in the next academic year (under the brand KenBridge
schools). A model B-school in Chennai is currently under operation.
• SKIL categorized as a co-promoter: In October 2010, SKIL was categorized as co-promoter in EEDU, which issued 4m
optionally convertible debentures to SKIL at Rs520 per share. This triggered an open offer of Rs587 per share, which
was completed on 27 November 2010 and led to SKIL acquiring 88,500 shares in EEDU. The deal between EEDU and
SKIL was so structured that post the open offer SKIL’s equity holding in the company would be lower than that of the
exiting promoter, P Kishore. As part of this agreement, EEDU has now issued 3.91m shares to SKIL and redeemed the
remaining OCDs (value of Rs46m). Post this transaction, SKIL’s stake in the company stands at 21.02% and the
existing promoter group’s holding has come down to 21.4% (from 26.9% earlier).
• Creating a strong Board: EEDU has inducted key industry veterans on its Board, including Tata Group veteran J J
Irani and Dr M S Vijay Kumar, senior associate dean at the Massachusetts Institute of Technology.
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