IPO Note : Jaro Institute of Technology Management & Research Ltd by Nirmal Bang Ltd
BACKGROUND
Incorporated in 2009, Jaro is an aggregator of online higher education and upskilling courses from various institutions like Symbiosis Intl, D.Y Patil Vidyapeeth, iFEEL, Bharti Vidyapeeth, etc. who act as partners in imparting classes online. Jaro caters to a total of 36 Partner Institutions with a pan-India presence in over 22 offices-cum-learning centres across major cities apart from 17 immersive tech studio set-ups in the campuses of various IIMs. These partner institutes benefit from marketing and promotion and student acquisitions and support from Jaro.
Details of the Issue
Jaro IPO is a book build issue of Rs. 450 cr. The issue is a combination of fresh issue of 0.19 cr shares aggregating to Rs.170 cr and OFS of 0.31 cr shares aggregating to Rs.280 cr.
Investment Rationale
1. Market leading position in online higher education and upskilling space with strong brand image and pan India presence.
2. High revenue predictability backed by long-lasting, robust client relationships. 3. Plan for expansion of geographical footprint in place.
Risks
1. Jaro may be adversely affected if its Partner Institutions start directly marketing their degree programs and certification courses.
2. Client Concentration Risks exist since 62% of revenues comes from Top 5 clients.
Valuation and Recommendation
Jaro has emerged as a leading player in India’s online higher education and upskilling platform. The Industry is expected to grow at a CAGR of 22% to reach Rs.0.85 lakh cr by FY28. Co successfully has developed partner relationships with leading Tier 1 and Tier 2 players and has plans to further capitalize on their trust by increasing geographical footprint along with introducing more courses grabbing immense opportunities unfolding in the industry. Moreover, Jaro has successfully taken fees hike share with its partners demonstrating its market leadership position. Co’s revenues/ebidta have grown at a cagr of 44%/89% during FY23-25 and has healthy return ratios. Issue at Upper price band is available at a P/E of 38x FY25 earnings and We recommend ‘Subscribe’ to the issue citing good future growth prospects.
Please refer disclaimer at https://www.nirmalbang.com/disclaimer.aspx
SEBI Registration number is INH00000176
