Dates: 29 March 2022 to 31 March 2022
Price Band: Rs. 130 to Rs. 137 per share
Minimum Lot: 100 shares
Minimum Application Amount: Rs. 13,000 to
Total Issue Size: Up to Rs. 200 crores
Objects of the offer
object of the offer is to repay certain part of borrowings taken in
consideration of acquisition of Edureka & rest of the proceeds for the
company’s growth initiatives.
Profile & Business overview
Veranda Learning Solutions Limited was incorporated on Nov 20, 2018,
but the company started their operations in Dec 2020. The company is
incorporated in Chennai, Tamil Nadu. The promoter group stake will fall to
around 65.87% after the IPO from 89.22% and the company is offering 1.46 crore
shares in the IPO.
company is in the business of providing diversified and integrated learning
solutions to students, aspirants, graduates, professionals, and corporate
employees enrolled in their courses through a variety of career-defining
competitive exams, professional courses, exam-oriented courses, and short-term
upskilling and reskilling courses in online, offline hybrid, and offline
blended formats. A total of 42,667 students and professionals enrolled in their
courses for the nine-month period ending December 31, 2021, with 16,793 in offline
models & 25,874 in their online models.
learning solution has 4 subsidiaries namely
Race Learning Solutions Private Limited: The
the content, brand, and educational resources from Chennai Race Coaching
Institute Private Limited in December 2020 through their wholly owned
subsidiary, Veranda Race. The company offers exam-oriented courses to students
who appear for competitive exams, such as State Public Service Commission,
Staff Selection Commission, Railway Recruitment Board, Banking & Insurance
Exam. The online video courses are available in English, Hindi & other
regional languages. The company is expanding its geographical presence in
Hyderabad & Bengaluru. The fee structure for the course lies in the range
of Rs 9,000-15,500. The number of students enrolled in this category is
XL Learning Solutions Private Limited (Veranda CA): Veranda CA offers exam-oriented
learning programs for CA Foundation, CA Intermediate & CA Final. The
organisation has hired 18 chartered accountants on a contract basis with
extensive experience in auditing and teaching to video record the learning units.
Trans Learning LLP and Veranda CA have signed a Chartered Accountancy Training
Services Agreement dated December 31, 2020. Trans LLP supplies the company with
necessary services and digital content for CA modules within the terms of the
agreement. The company uses an online format to
provide services to its students, and it now has over 400 students registered.
The fee structure for the course ranges from Rs 10,000-39,500.
IAS Learning Solutions Private Limited (Veranda IAS): Veranda IAS offers coaching services
to aspirants appearing for UPSC prelims and mains & State Public Service
Commission Group-I exams. Veranda IAS
has entered into a UPSC training, and Miscellaneous Service Agreement with SAI
IAS Academy dated 5th March 2021.
Pursuant to the arrangement, Veranda IAS is in process of creating
digital content and related study materials for UPSC course comprising 850
hours of video content & slides of Power Point Presentation content. The fee structure for the course ranges from Rs
Education Solutions Private Limited (Edureka): The company purchased a 100% stake in Edureka according
to a Share Purchase Agreement dated August 30, 2021. The company has grown its
footprint in software education and in global markets, particularly in the
United States, with the acquisition of Edureka. Edureka offers academic
learning in trending courses such as Cloud Computing, Devops, ML/AI, Data
Science, Big Data, Block Chain, Cyber Security, Robotic Process Automation, and
many other fields through live online classes.
The courses offered by Edureka can be
divided into three categories i.e. (i) 137 Short Term Courses, (ii) 6 Long Term
Courses, and (iii) Corporate Learning Programme for IT companies. Eureka’s
Corporate Learning Program served more than 149 tech organisations in Fiscal
2021. The company has collaborated with various leading and premier higher
education technology institutions to offer PG Diploma Certificate Short Term
Courses. The number of students enrolled with Edureka is more than 17,000+
students. The fee structure varies from Rs 5,000- 275,500.
Revenue from Operations
EBITDA Margin (%)
PAT (from continuing operations)
PAT Margin (%)
Net Cash Flows
company is a loss-making company with a net debt of Rs 173.15 crore and a Debt/ Equity ratio of 7.62x which is on a very high side. The revenue from operations for 6M
of FY22 were Rs 15.46 crore with a negative EBITDA of Rs 15.25 crore. Company
reported net loss of Rs 18.27 crore in 6MFY22. Since the company began its
operations in December 2020 itself, the company
does not have a proven financial track record. Further, considering the
operational performance of ^M of FY22, the company has delivered a 80% negative
return on its equity.
oriented method of teaching with 360-degree approach: Veranda has an in-house and
outsourced team of Mentors that are continually monitoring the students'
progress, identifying their particular needs, and assisting them in achieving
their objectives. The company believes that by focusing on a result-oriented
manner of teaching, they are able to transfer knowledge to students, assisting
them in achieving success in the relevant courses.
Diversified course offerings and
delivery channels: Through company’s online,
offline hybrid, offline blended, campus in campus & online live instructor
led learning model in various languages, Veranda provides a wide range of
learning solutions to students and professionals, including competitive exams
courses, professional courses, short term upskilling and reskilling courses,
and thus company’s services give them a competitive edge over other player who
are more course specific.
Extensive experience in the education
business and professionally qualified human capital: The company is led by a group of seasoned professionals. Each
Subsidiary is led by and staffed by individuals with extensive operational and
business experience in the courses offered by the Subsidiaries.
Strong Brand Presence: Veranda has a good presence in competitive exam-oriented courses
such as Banking, SPSC, Insurance, RRB, and SSC. The company has entered the
market to deliver instructor-led learning in the specialist information
technology domain with the acquisition of Edureka.
of IP Rights: The
intellectual property developed by the company has not been registered under
the patent or copyright laws of India. The company may not be able to
appropriately safeguard their intellectual property rights in the case of a
copyright dispute in any of their products or content.
proceedings against the Promoters:
The Promoters, Directors, and Group Companies are all involved in ongoing legal
disputes. These cases are now pending in various courts at various stages of
associated with the Non-Convertible Debenture issue: The Company recently issued
7,378,585 fully paid-up, secured, redeemable, non-convertible debentures with a
face value of 100 and a coupon rate of 4% per annum ("NCD") to
certain of Edureka's then Shareholders & Promoters. The promoters of
Edureka utilised a part of the consideration received from the Company for
acquisition of shares of Edureka, towards subscription to NCDs. If the company
is unable to meet its payment obligations for the redemption of the NCD and
interest thereon, the NCD holder may enforce the pledge on Edureka shares and
transfer those shares.
Risk of Cyber-Security breach: The company is bound by data privacy laws, rules, and regulations
that govern how they use consumer information. Compliance with these laws,
rules, and regulations may limit their business activities, necessitate
additional expenses, and compel them to commit significant time to compliance
The company has no listed peers in India
and hence a comparison on the valuation is not possible. The Price to Sales
(P/S) ratio for the company considering annualised sales for FY22 stood at over
24.5x which seems expensive for a loss-making company with merely 1.5 years of
The company being relatively young, does
not have a proven financial track record and for 6M ended FY22, the financial
results are not very impressive. Further, the company is highly leveraged with
a pledge on promoter’s shares which increase the risk. Even though the ed-tech
space in India is fast growing, the weak financials of the company along a with
steep valuation do not provide confidence for investment purpose. Considering
the above factors, we advise the investors to ‘AVOID’ subscribing to
this IPO for the time being.