Why is education sector attracting money, experts find out

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A couple of weeks ago Azim Premji private investment fund PremjiInvest invested in the Manipal Education Group. That is not as much as a surprise because the education space has been very attractive to private equity players for a while now. The sum is a bit of a surprise because it invests Rs 200 crore in the Manipal Education Group-that is a big sum. Also earlier this week Human Resource Development Minister Kapil Sibal told CNBC TV-18 that the government was looking to set up an education finance corporation to the tune of Rs 20,000-25,000 crore to provide for long term low cost financing to the space. That again is a big sum to be talking about.

Anand Sudarshan, Managing Director and Chief Executive Officer, Manipal Education-the man who just got Rs 200 crore a few weeks ago and Rajesh Singhal, Managing Partner, Milestone Religare, that has a dedicated educated fund, discuss the opportunities available in education and how this fund could best be put to use.

Here is a verbatim transcript of the exclusive interview. Also watch the accompanying video.

Q: You got Rs 200 crore. I understand from your press release that you are going to put most of that money into developing, expanding and building new facilities outside of India. Why not India? There is ample opportunity availability here?

Sudarshan: The Indian opportunities are enormous but remember in India if you were to look at private equity or corporate enterprise structured operations and opportunities, they are not in the core higher education space. The core higher education space which you could define as universities or institutions that can offer degrees and diplomas and that have to be under not-for-profit structure. So the opportunities to actually invest in campus and universities here is quite remote.

The main opportunities in India around that space which could be in training, which could be in other areas such as testing and assessment, it could be in other areas which is e-learning and so on and so forth. So, essentially those are the areas that are open for private equity investment. In our case while we are present in those areas a substantial portion of capital investment requirements are for setting up campus outside India.