Crizac plans to raise Rs 860 crore via IPO amidst growing B2B student enrollment challenges

Synopsis

Crizac, a B2B student enrolment platform, plans to raise ₹860 crore via offer for sale, reducing promoter stake to 80%. The company exhibits high revenue growth, primarily from the UK, but also shows fluctuating EBITDA margins.

ET Intelligence Group: Crizac, a B2B platform helping global educational institutes and agents in student enrolment, plans to raise ₹860 crore through an offer for sale. The promoter group's stake will fall to 80% after the IPO from 100%. The company has negative working capital as it gets paid from the institutions first and then pays agents later.

The business is seasonal, with second half of the year making more revenue. About 95% of its revenue comes from UK alone, signalling high geographic concentration.

The number of students enrolled in various institutes through the company is not given in the RHP, making it difficult to forecast future growth. Given these factors, investors may wait and track the company's performance after the listing.

Between FY23 and FY25, Crizac processed over 710,000 student applications and worked with over 173 global institutes. In FY25; it had 3,948 active agents and of this, 2,237 were in India and 1,711 in 39 countries.

Agencies

Revenue from operations grew 76% annually to ₹850 crore in FY25 from FY23. There has been volatility in Ebitda due to termination of certain contracts in the previous year; yet it has risen 42.5% annually to ₹212.8 crore during the period. Ebitda margin slipped to 25.1% in FY25 from 38.2% in FY23.

Net profit increased gradually to ₹152.9 crore in FY25 from ₹110.1 crore in FY23. The company has negative working capital days of 1.8. Total current liabilities have surged to ₹367.7 crore in FY25 from just ₹1.2 crore in FY23, on account of outstanding dues payable to creditors. Trade receivables jumped 53% on-year to ₹256.4 crore.

The company demands a price-earnings (P/E) multiple of up to 28. It does not have direct peers listed in India. Australia-headquartered IDP Education, which has a similar business, and nearly seven times higher revenue than Crizac, trades at a P/E of 7.6.

...moreless

...moreless