Ascensive Educare coming with an IPO to raise upto Rs 2.26 crore

Ascensive Educare

• Ascensive Educare is coming out with an initial public offering (IPO) of 8,68,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 26 per equity share.
• The issue will open on December 30, 2021 and will close on January 4, 2022.
• The shares will be listed on SME Platform of BSE.
• The share is priced 2.60 times higher to its face value of Rs 10.
• Book running lead manager to the issue is GYR Capital Advisors.
• Compliance Officer for the issue is Anand Lohia.

Profile of the company

The company was incorporated as “Ascensive Educare Private Limited” under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated December 26, 2012 issued by the Registrar of Companies, Kolkata, West Bengal. Further, the company was converted into a Public Limited Company and the name of the company was changed to “Ascensive Educare Limited” vide special resolution dated April 16, 2020. A fresh certificate of incorporation consequent to conversion into public limited Company was issued to the company by the Registrar of Companies, Kolkata, West Bengal on May 04, 2020. The company was recognized as a startup pursuant to the Certificate of Recognition dated June 29, 2018 issued by Department for Promotion of Industry and Internal Trade.

The company is engaged in the business of training and skill development offering vocational training, and educational consulting in collaboration with Central Government, State Governments and various Industries and Industry Associations. The company has been core to delivering high-quality training interventions that range from conducting training workshops to placement. Its course curriculum is NSFQ compliant and experienced trainers, including the ones certified by the Sector Skills Council, take care of all the training programs. The company is an accredited NSDC training partner provider and offers nationally recognized qualifications and skill-sets that comply with industry standards. The company provides the platform for the skill developments at grass root level to skilled and re-skilled the workforce of India so that they can rightfully participate in this phase of growth of the nation. The company is focused towards working in the field of education and skill development and committed to play a valuable role in supporting the scaling up process of rural livelihood.

Proceed is being used for:

• Funding the working capital requirements of the company.
• General corporate purposes.

Industry Overview

Education is fundamental for achieving full human potential, developing an equitable and just society, and promoting national development. Providing universal access to quality education is the key to India’s continued ascent, and leadership on the global stage in terms of economic growth, social justice and equality, scientific advancement, national integration, and cultural preservation. Universal high-quality education is the best way forward for developing and maximizing the country’s rich talents and resources for the good of the individual, the society, the country, and the world. India will have the highest population of young people in the world over the next decade.

India has the world’s largest population of about 500 million in the age bracket of 5-24 years, which provides a great opportunity for the education sector. The education sector in India was estimated at $91.7 billion in FY18 and is expected to reach $101.1 billion in FY19. Number of colleges in India reached 39,931 in FY19. As of May 17, 2021, number of universities in India reached 981. India had 37.4 million students enrolled in higher education in FY19. In FY20, Gross Enrolment Ratio in higher education in India was 27.1%. ICAR is one of the largest national agricultural organisations in the world. It has 122 institutes and 67 agricultural universities across India, as of July 2021.

Education sector has seen a host of reform and improved financial outlays in recent years that could possibly transform the country into a knowledge haven. With human resource increasingly gaining significance in the overall development of the country, development of education infrastructure is expected to remain the key focus in the current decade. In this scenario, infrastructure investment in the education sector is likely to see a considerable increase in the current decade The Government of India has taken several steps including opening of IIT’s and IIM’s in new locations as well as allocating educational grant for research scholars in most Government institutions. Furthermore, with online mode of education being used by several educational organisations, the higher education sector in India is set for major change and development in the years to come. 

Pros and strengths

Providing industry oriented training: The company provides its affiliates the best possible industry oriented training and education. Its vision is to provide high-quality training and education to Indian youth and empower them to become outstanding and exemplary members of the global workforce. As a reliable skill Development Company in Kolkata, the company is striving hard to offer quality education & professional training to the unemployed youth in India.

Ability to serve skilled manpower requirement: As per World Economic Outlook, October 2020 while the Emerging and Developing Asia’s real GDP is expected to grow by 5.9% till 2025, India’s real GDP is expected to grow by 7.2% at the same time. The company’s ability to serve to the skilled manpower requirement across sectors with its skill development programmes and industry specific education is its competitive strength.

Skilled and dedicated manpower: The company is served by a team of experienced and knowledgeable personnel. The team comprises of personnel having technical, operational and business development experience. Its team’s experience and their understanding of the industry enables it to continue to take advantage of both current and future market opportunities. The company takes pride in relating its success to its employees, for their consistent efforts and dedication has brought it to where it is today.

Risks and concerns

Business is cyclical in nature: The company’s training as well as higher education in the field of management studies are closely linked to the academic cycle and the timing of competitive entrance examinations for admission to various professional institutions. Due to various offerings also and its enrolments in training division and while it is not been historically required to publish its audited quarterly results, as per its management estimates, cash flows during some quarter have typically been lower, compared to other fiscal quarters. As a result, the company’s quarter-on-quarter data regarding its enrolments and cash flows may not be comparable for any future.

Huge capital requirement to support business growth: To continue to effectively compete, the company will require additional funds to support the growth of its business and allow it to invest in new products, offerings, and markets. If it raise additional funds through further issuances of equity or convertible debt securities, its existing stockholders may suffer significant dilution, and any new equity securities it issue may have rights, preferences, and privileges superior to those of existing stockholders. Certain of its existing debt instruments contain, and any debt financing it secures in the future could contain, restrictive covenants relating to its ability to incur additional indebtedness and other financial and operational matters that make it more difficult for it to obtain additional capital with which to pursue business opportunities.

Stiff competition: The market for its services is competitive on account of both the organized and unorganized players. Players in this industry generally compete with each other on key attributes such as quality of products, distribution network, skilled man power, pricing and timely delivery and quality of services. Some of its competitors may have longer industry experience and greater financial, technical and other resources, which may enable them to react faster in changing market scenario and remain competitive. Moreover, the unorganized sector Issues their products at highly competitive prices which may not be matched by it and consequently affect its volume of revenue and growth prospects. Growing competition may result in a decline in its market share and may affect its margins which may adversely affect its business operations and its financial condition.

Outlook

Ascensive Educare is engaged in the business of training and skill development offering vocational training, and educational consulting in collaboration with Central Government, State Governments and various Industries and Industry Associations. The company has been core to delivering high-quality training interventions that range from conducting training workshops to placement. On the concern side, the company’s business is linked to the academic cycle and is, therefore to some extent is cyclical in nature. Accordingly, comparisons of its enrolments in training institutes and cash flows may not be the same. The company faces competition in its business from organized and unorganized players, which may adversely affect its business operation and financial condition.

The company is coming out with a maiden IPO of 8,68,000 equity shares of Rs 10 each at a fixed price of Rs 26 per share to mobilize Rs 2.26 crore. On performance front, in fiscal 2021, the company’s total income increased by Rs 65.95 lakh or 5.20%, from Rs 961.36 lakh in fiscal 2020 to Rs 1,027.31 lakh in fiscal 2021. The increase was due to increase in the revenue from operations as compared to last year. Meanwhile, profit after tax increased by Rs 0.57 lakh or 1.31% from Rs 43.48 lakh in fiscal 2020 to Rs 44.05 lakh in fiscal 2021. Skill Development Industry shall observe a rapid growth in the coming years. Also demand for skilled personnel is likely to increase in near future and the company intends to capitalize on such growth opportunities. The company is well positioned to cater to demand of such sector with its services and competitive pricing structure.