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Cashing on Education

Thursday, September 16, 2010
By Mayura Shanbaug

Career Point Infosystems

Career Point Infosystems Limited will be entering the capital market today with an initial public offering of 38,98,305 shares at a face value of Rs 10 each in a price band of Rs 295 - Rs 310 to raise around Rs 115 The offer closes on September 21

The company is a tutorial services provider to high school and post high school students for various competitive entrance examinations including the All India Engineering Entrance Examination, Indian Institute of Technology - Joint Entrance Examination and All India Pre-Medical and Pre-Dental Test through its 17 training centres and 16 franchisee centres.

Of the proceeds of the issue the company plans to utilise Rs 68.25 crore for construction and development of an integrated campus at Kota, Rs16.48 crore for expansion of classroom infrastructure and office facility and Rs15 crore for acquisitions and other strategic initiatives.

On the positives is the fact that the spending on education is growing and the constitution of almost 32% of the Indian population being in the age group of up to 14 would require an increase in the number of schools, colleges and universities. As such the potential growth for the education business remains positive.

On the financial front the company posted a net profit of Rs18 crore on total income of Rs 66 crore for the year ended 31 March 2010. Its earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs28 crore and it had a net cash flow of Rs 9.45 crore. It earnings per share (EPS) stood at Rs13.17.

Incidentally rating agency CARE has assigned an 'IPO Grade 3' to the issue indicating 'Average Fundamentals'.

Issue Highlights:
Issue Open: Sep 16, 2010 - Sep 21, 2010
Issue Type: 100% Book Built Issue IPO
Issue Size: Rs. 115.00 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 295 - Rs. 310 Per Equity Share
Market Lot: 20 Equity Share
Listing At: BSE, NSE

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