Chetana Education Ltd IPO: Review, Valuation, Date & GMP

Chetana Education Limited IPO - Complete Overview

Chetana Education Limited IPO by Chetana Education Limited was founded in 2017 and specializes in the publication of textbooks for CBSE/State Board curriculum for the K-12 segment, as well as educational software for educational films for teachers and students that can be accessed via QR codes.

The Union Budget 2023-24 allocates Rs. 68,804.85 crore (US$ 8.3 billion) to the Department of School Education and the Budget 2022-23 allocated Rs. 59,819.37 crore (US$ 8 billion) for Education, representing a 13.06% year-on-year increase. India's online education industry is projected to increase by US$ 2.28 billion between 2021 and 2025, with a CAGR of over 20%. In 2021, the Indian market grew by 19.02%.

The Indian edtech market is predicted to be worth US$ 30 billion by 2031, up from US$ 700-800 million. In 2021, edtech has received nearly $4 billion in private equity investments in the last five years.

Chetana Education now serves the Maharashtra State Board and the Central Board of Secondary Education (CBSE), providing textbooks ranging from early pre-primary to K-12 courses. The business has sold more than six million books to kids at all levels of education, including pre-primary to elementary, middle school, and upper secondary. The organization works with around 400 contract authors who help create material for the company.

As of 2023, the company's portfolio includes 700 titles under 15 various brands such as Master Key, Self-Study, Firefly, Bright Buddies, My Skill Book, Grade Me, QR Series, and so on. The organization has also created a variety of online materials to help students comprehend specific courses and use the content for a more effective learning experience. The company has formed a strategic cooperation with Allern Enterprises Private Limited, an ed-tech company, and has created over 30,000 movies that can be accessed using QR codes.

As of January 2024, the company's distribution and sales network included over 500 distributors and dealers, as well as a specialized sales force based in branches and marketing centers across India.

By March 31, 2024, the company hired 408 employees.

Dear readers, we are pleased to provide details about the approaching IPO. The company plans to launch its IPO on July 24, 2024. Let's take a closer look at the IPO's offerings below.

Chetana Education Limited IPO Overview

Chetana Education IPO is an SME book-built issue of Rs.45.90 crores comprising a wholly Fresh Issue of 54 lac Shares (amounting to Rs.45.90 crores) out of which 35% is allocated to retail investors, 50% to institutional investors, 15% to non-institutional-investors.

The IPO will be available to investors on July 24, 2024, and conclude on July 26, 2024. The anticipated listing date for the IPO is Wednesday, July 31, 2024, and will be held on the NSE and SME. The price range of each Share is Rs.80 to Rs.85.

If you want to apply for the IPO, Click Here to Open a Demat Account.

 

Company Financial

The company's revenue increased by 23.89%, while profit after tax (PAT) increased by 75.57% during the financial years ending March 31, 2024, and March 31, 2023. 

Below is the synopsis of the company's financial data for the financial year ending March 31, 2024.

• The total revenue of the company is Rs.9,367.06 lac.

• The net worth of the company is Rs.2,524.55 lac.

• The company's EBITDA is Rs.2109.30 lac.

• The total assets of the company are Rs.9,475.09 lac.
  
  

(Amount in lac)

Period	31 Mar 2024	31 Mar 2023	31 Mar 2022
Total Assets	9,475.09	8,315.08	7,605.82
Total Revenue	9,367.06	7,560.77	4,312.21
PAT	1,203.47	685.47	168.06
Net Worth	2,524.55	2,281.92	1,947.33
Reserve & Surplus	1,024.55	-	-
Borrowing	5,128.73	4,299.50	3,876.03

 

Revenue Bifurcation

Below is the revenue breakdown for various activities:

(Amount in lac)

Net Cash Flow In Multiple Activities	FY 2024	FY 2023	FY 2022
Net Cash Flow Operating Activities	693.37	166.26	550.41
Net Cash Flow Investing Activities	27.17	-179.46	-5.66
Net Cash Flow Financing Activities	-482.51	-191.45	-208.18

Quarter-wise Sales In Last Three Financial Years

 

The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Repayment of various borrowings obtained by the business, either in part or whole;

• Working capital requirement

• Corporate Purpose

 

Peers of Chetana Education Limited

(Figures as of March 31, 2024)

Company Name	Face Value (Rs.)	EPS (Rs.)	P/E (x)
S Chand And Company Ltd	5	14.53	16.50
Navneet Education Limited	2	11.12	14.22

 

Evaluation

The price of this IPO is Rs.80 to Rs.85 for each Share.

Evaluation Of P/E Ratio

Considering the Fiscal that concluded on 31 March 2024, with EPS of Rs.8.02 from the last year, the resulting P/E ratio is 10.59x.

Considering the weighted EPS of Rs.5.72 for the last three years, the P/E ratio is 14.86x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 15.36x.

Particulars	P/E Ratio
Highest	16.50
Lowest	14.22
Average	15.36

In simple words, the P/E ratio of Chetana Education Limited-IPO (10.59x and 14.86x), compared with the industry’s average P/E of 15.36x, has an undervaluation. Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths

• Focused digital and technological platform.

• Consumer-focused education content player.

• A dominant position in the K-12 market.

• Established a network for creating content and printing.

• An extensive distribution and sales network.

• A skilled leadership and management team.
  
  

IPO’s Weaknesses

• Their business is inextricably linked to the academic calendar, which makes it rather cyclical in nature. Its earnings and financial performance might not be comparable between periods.

• Its product is vulnerable to changing test patterns, curriculum, and client preferences. Failure to address these needs may impact its business.

• The business relies heavily on the content of its published books and the writers who create them. The loss of any or all of its authors might harm its business, performance, cash flow, and financial condition. 

• The company relies heavily on the Maharashtra Board and CBSE for its revenue, therefore any issues with them could have a negative influence on its business.

• The company had negative net cash flows in the past and may continue to have negative cash flows in the future.

IPO GMP Today

Chetana Education Limited IPO’s latest GMP is Rs.43.

Chetana Education Limited IPO Timetable (Tentative)

The IPO is scheduled from July 24 to July 26, 2024, with allotment on July 29, refund initiation on July 30, and listing on July 31, 2024.

Events	Date
IPO Opening Date	July 24, 2024
IPO Closing Date	July 26, 2024
IPO Allotment Date	July 29, 2024
Refund initiation	July 30, 2024
IPO Listing Date	July 31, 2024

 

Chetana Education Limited IPO Details 

The IPO with a Face Value of Rs.10 per Share is set to start on July 24, close on 26 July, and offer a total issue size of 5,400,000 Shares (aggregating up to Rs.45.90 Cr) comprising a whole fresh issue size of 5,400,000 Shares (amounting to Rs.45.90 Cr).

IPO Opening & Closing Date	July 24, 2024 to July 26, 2024
Face Value	Rs.10 per Share
Issue Size	5,400,000 Shares (amounting to Rs.45.90 Cr).
Offer for Sale	NA
Fresh Issue	5,400,000 Shares (amounting to Rs.45.90 Cr).
Listing at	NSE, SME
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

Chetana Education Limited IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (1600 Shares) amounting to Rs.136000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (3200 Shares) amounting to Rs.272000.

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
HNI (Min)	2 Lots

 

Chetana Education Limited IPO Reservation

Institutional Portion	50%
Retail Share Portion	35%
Non-Institutional Portion	15%

 

 

Promoters And Management of Chetana Education Limited IPO

• Mr. Praveen Tyagi

• Anil Jayantilal Rambhia

• Rakesh Jayantilal Rambhia 

• Shilpa Anil Rambhia

Pre-Issue Promoter Shareholding	100%
Post-Issue Promoter Shareholding	73.53%

Chetana Education Limited IPO Lead Managers

• Hem Securities Limited
  
  

Dividend Policy

The company has not paid any dividends in the last three financial years.

Conclusion

After reaching Rs.7560.77 lakhs in FY 2023, the company's overall income increased by 23.89% to Rs. 9367.06 lakhs in FY 2024. The primary cause for the increase was the influx of new clients and the expansion into new publications in the K-12 sector. Furthermore, the company has experienced negative cash flow in financing and investing activities throughout the last few fiscal years. To achieve its goals, the company is currently launching an IPO for the general public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

We believe this blog would be very beneficial to you if you are looking for such information related to this upcoming IPO since this blog would provide you with accurate information about the company's, insights, financials, and past performance. If this informative blog matches your interest, you might be interested in reading our other related useful blogs on our website.

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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