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Rising Enrolments and tuition fees drive growth in Indian Education System

This optimistic outlook is supported by two major factors: a consistent increase in student enrollments and an upward trend in tuition fees per student

Rising Enrolments and tuition fees drive growth in Indian Education System
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India Ratings and Research (Ind-Ra) has reiterated its positive forecast for the education sector in fiscal year 2024-25.

This optimistic outlook is supported by two major factors: a consistent increase in student enrollments and an upward trend in tuition fees per student.

The agency predicts that rising middle-class incomes and rising demand for high-quality education will drive increased investment in infrastructure development and the implementation of cutting-edge facilities across educational institutions.

Ind-Ra believes the emerging prominence of digitalisation, distance education mode and e-learning content will be the key positive in the Indian education space.

The rating agency opined the evolving and reorganising group structures in the Indian education sector, increasing financing options in the form of private equity investments and various government initiatives would further drive the growth of the sector during 2024-25 and 2025-26.

It believes foreign direct investments by private equity and venture capital players hold enormous potential to stimulate the Indian education market.

Despite the challenges and regulatory complexities in the Indian education space, the sector attracted notable foreign investments over 2012-13-2022-23 (CAGR: 7.76 per cent).

Ind-Ra expects the revenue base of educational institutions to grow on account of a hike in tuition fees per student, which was not revised during COVID-19.

However, a few institutions have not revised fees post-COVID-19 as these are mainly run as not-for-profit entities.

Ind-Ra has revised the rating Outlook for 2024-25 to Positive from Stable for the educational institutions in its portfolio, on the expectation of an increase in enrolments as demand for courses offered by these institutions is rising.

The majority of Ind-Ra-rated educational institutions reported a growing student headcount for 2023-24, which is likely to continue in 2024-25.

Most of the rated educational institutions have surpassed the pre-covid level in terms of headcount. Consequently, their revenue base also improved in 2023-24 and they are likely to report a further increase in 2024-25.

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