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Salient features of the FPO:

• South India based off-line hybrid edu-tech company Veranda Learning Solutions Ltd. (VLS), is coming up with an IPO to raise Rs. 200cr, which opens on 29th Mar. and closes on 31st Mar. 2022. The price band is Rs. 130 - 137 per share.

• The IPO only comprises of fresh issue of shares. From the net proceeds, Rs. 60cr will be utilized for the repayment/pre-payment of borrowings; Rs. 50cr will be used for future growth initiatives and around Rs. 25cr will be used for the payment/funding the acquisition of Edureka - a software education company.

Key competitive strengths:

• Proven track record of the promoters

• Result oriented method of teaching with 360 degree approach • Diversified course offerings and delivery channels

• Extensive experience in the education business and professionally qualified human capital

• Strong presence of brands

• Track record of successful acquisition and expansion

• Efficient infrastructure and resource management with strict quality control standards and affordable courses

• Technology driven, asset light & scalable business model

• Pandemic proof model

Risk and concerns:

• Unfavorable government policies and regulations

• Unsuccessful inorganic expansion steps

• Difficulty in expanding in the K-12 edu-tech market

• Unfavorable revenue-mix

• Business seasonality

• Continued loss making operation

• Difficulty in managing the debt levels

• Competition

Below are the key highlights of the company:

In India, online education offers a variety of courses including curriculumbased coaching, test preparatory coaching, higher education degree courses, reskilling & skill enhancement programs, and language & casual learning. The domestic edu-tech market is estimated at USD 2.8bn in 2020, which is anticipated to grow 39% CAGR to USD 10.4bn in 2025.

• Kindergarten to 12th grade education (K-12) had the highest market share of 41.4% in 2020 and is expected to retain the top spot with an expected market share of 41.3% in 2025. This will be followed by test preparation and online certification. Test preparation market share is expected to increase fastest from 28.6% in 2020 to 38.4% market share in 2025.

• Incorporated in Nov. 2018, VLS offers diversified & integrated learning solutions via online, offline hybrid and offline blended formats to students, aspirants and graduates (collectively students); professionals and corporate employees (learners); which are enrolled across different courses like competitive exams, professional courses, exam-oriented courses, short term upskilling & reskilling courses etc.

• The company provides comprehensive long term and short term preparatory courses in a simple and lucid manner to the students preparing for UPSC Exams, State Public Service Commission, Staff Selection Commission, Banking, Insurance, Railways and Chartered Accountancy. It also provides customized short term skilling courses, long term courses and other corporate courses for its Learners category of the customers.

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