Veranda Learning Acquires TIME For Rs 287 Cr | Kalpathi S. Suresh, ED & Chairman, Veranda Learning — Transcript

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1. 0:00time to connect with the management of
2. 0:01Veranda on their acquisition that
3. 0:03they've undertaken we've got kalpati Sur
4. 0:06who is the Ed uh of the as well as
5. 0:09chairman of the company now joining in
6. 0:11thanks so much for taking time out so uh
7. 0:14let's start off by talking about this
8. 0:16acquisition the time acquisition is the
9. 0:18company profitable on an operating basis
10. 0:20or a net basis and if not how much will
11. 0:23be uh the loss amount how are you
12. 0:25looking at funding this
13. 0:27acquisition uh time uh thank you for the
14. 0:30opportunity uh time as a business has
15. 0:33been a
16. 0:34profitable uh Enterprise for over a
17. 0:38decade um It's a Brand that's been in
18. 0:40existence for over 30 years um the
19. 0:43business is highly
20. 0:45profitable uh for the half year ended
21. 0:49September of
22. 0:512021 um they had an abeda of 18 crores
23. 0:55uh though this is a seasonal business we
24. 0:57expect them to end at an AIT between 25
25. 1:00to 30 crores for f522 so it is a
26. 1:03profitable business we will be funding
27. 1:06this through leverage of a balance sheet
28. 1:09and I think as part of the IPO proceeds
29. 1:11our intent in deleveraging our balance
30. 1:13sheet which had been levered for the
31. 1:15Acquisitions we had done in the past was
32. 1:18exactly for the reason of creating an
33. 1:20unlevered balance sheet that we will now
34. 1:22start leveraging to completing some of
35. 1:24these Mar Acquisitions so we are very
36. 1:27excited about time it gets us into many
37. 1:29areas of test prep of course as most of
38. 1:33most of us know that in the space of cat
39. 1:37and I IM exams 50% of students in I am
40. 1:40are time students so it's a powerful
41. 1:42franchise uh National recall but we want
42. 1:46to use this also to get into other areas
43. 1:48of test prep like gate uh neat IIT J
44. 1:53which are significantly larger uh
45. 1:55markets so apart from that I think some
46. 1:58of the things that we are very excited
47. 2:00about it also gets us into the preschool
48. 2:03space Through Time kids close to 250
49. 2:06locations in over 70 cities in the
50. 2:08country uh and that also gets us into a
51. 2:11different facet of the education markets
52. 2:13in India so it's a highly profitable
53. 2:15business which has been our uh principle
54. 2:18to acquire Mary businesses with
55. 2:21education pedigree that are highly
56. 2:24profitable so walk us through um you
57. 2:27know the financials because I understand
58. 2:29that times revenues have declined
59. 2:30largely on account of the pandemic over
60. 2:32the last two years so how confident are
61. 2:34you of achieving those fy19 levels when
62. 2:37it comes to revenue and within what time
63. 2:39period are you gauging this could happen
64. 2:42I think what is what the pandemic had
65. 2:44run of course was there was a shrinkage
66. 2:46of Revenue during the initial years of
67. 2:48very significant lockdown but I think
68. 2:51like many other businesses the
69. 2:53management at time also learned to make
70. 2:56the business streamline that has ensured
71. 2:58that their profitability was maintained
72. 3:00and intact
73. 3:02fy22 brand collections are expected to
74. 3:05be in the region of about 180 crores uh
75. 3:09and I think in about a year's time with
76. 3:11the changes that we plan to bring we
77. 3:14should be able to go back to hitting our
78. 3:16Peak numbers in the next 12
79. 3:22months um that's the view coming in on
80. 3:24the financials now um I just want to
81. 3:27understand what the current caches on
82. 3:29the company books right now and uh I
83. 3:32understand you have about 50 CR rupees
84. 3:33this is from the IPO fundraise which is
85. 3:35for your growth initiatives what about
86. 3:37the remaining 237 CR rupees and how much
87. 3:39debt will you
88. 3:41take uh so this acquisition will be
89. 3:44funded by a combination of primary and
90. 3:47mde uh the uh Acquisitions will be
91. 3:52completed through uh Deb race the
92. 3:55current IPO funds that were raised is to
93. 3:58fuel our organic growth
94. 4:00um the monies that we have for General
95. 4:03Corporate expense maybe some of it could
96. 4:05be used but largely this is the
97. 4:07Acquisitions are going to be funded
98. 4:09through uh freshly raised debt on a
99. 4:11balance sheet that is not debt
100. 4:17free okay two questions from here
101. 4:20whether or not you have any further
102. 4:22plans for an Equity Fund raise and uh B
103. 4:27why is it that you increase your
104. 4:29borrowing ing limit to, CR rupees are
105. 4:31you actually planning to raise that much
106. 4:34of a you know amount in the near
107. 4:38term uh so the uh as far as debt is
108. 4:44concerned it was earlier at about 250 we
109. 4:47raised it to about 1,000 crores um uh as
110. 4:51far as an equity raises concern our aim
111. 4:55would be to complete Acquisitions
112. 4:59demonstrate integrate those businesses
113. 5:01demonstrate the combined strength and
114. 5:03profitability of the business and then
115. 5:05at some point we would contemplate an
116. 5:08equity rise to again deleverage the
117. 5:10balance sheets the idea of taking it to
118. 5:131,000 crores uh as we had mentioned in
119. 5:17the past
120. 5:18conversations apart from the significant
121. 5:20organic growth that we expect to
122. 5:22Showcase over the next two three years
123. 5:24based on businesses that we already have
124. 5:27Veranda as a platform is being stitched
125. 5:29together through Mar Acquisitions uh
126. 5:32these would be significantly education
127. 5:35pedigreed businesses with very high
128. 5:37profitability levels what we will bring
129. 5:40to them as what we would bring to time
130. 5:43is to make them in every facet of their
131. 5:45business the best native online platform
132. 5:48in the respective test prep areas in the
133. 5:50country the second would be to leverage
134. 5:54on the promoters experience of creating
135. 5:57uh large networks nationally to also use
136. 6:00this in the case of time to expand our
137. 6:02national presence into tier 2 tier three
138. 6:04and tier four DS additionally for our
139. 6:07new partners of time who are joining The
140. 6:10Veranda Network there are many verticals
141. 6:12and products that we have and the first
142. 6:15opportunity to leverage on them in their
143. 6:17respective areas will be given to our
144. 6:20new time Partners so we also expect our
145. 6:23existing Partners to do well this will
146. 6:26allow us to stitch the fabric of The
147. 6:28Veranda plan form to go across academic
148. 6:31test prep and upskilling Market spaces
149. 6:34so the idea of a, CR expansion of a dead
150. 6:38ceiling from 250 is to ensure that we
151. 6:41have space to accommodate potential
152. 6:45Acquisitions where there are some
153. 6:46conversations at various
154. 6:51stages
155. 6:53interesting okay uh great to speak with
156. 6:55you today thank you so much for taking
157. 6:57the time out and helping us understand
158. 6:59Mr S as to what really is this
159. 7:02acquisition going to bring on the table
160. 7:04for us and what are the future plans
161. 7:05with this going forward thank you thank
162. 7:08you for the opportunity