TATA: Into School education space

Tatas may venture into school education space

The Tata group is planning a major entry into the Indian educational space, sources said. E-learning-focused group company Tata Interactive Systems (TIS) may soon unveil a strategy for setting up preschools across the country. Though the initial plan is to set up preschools, the long-term vision of the group is to have K12 schools (catering to students from standards one to twelve) in Tier 1 cities.

It is learnt that TIS may unveil its mega plan within the next two weeks. The group may invest close to Rs 1,000 crore in what will be its first major commercial venture in the education space. Most Tata companies look at education from a corporate social responsibility point of view.

Education in India is mainly provided by the public sector, with control and funding coming from three levels — Central, State and local. It is only recently that corporate biggies such as Zee, the Yash Birla Group and HDFC have publicly evinced interest in this burgeoning space. Effectively, the unlisted TIS is taking the cue from rival e-learning firms such as Educomp, Everonn and Core Projects & Technologies which have charted a similar diversification strategy.

TIS' solutions have been deployed at more than 60 ‘Fortune 500' companies, leading educational institutions and government departments across India, the Middle East, the US and other countries, says the company Web site.

Pie, large enough?

Industry sources feel that the Tata's move will help organise India's fragmented education market. But, then, is the pie large enough for so many players?

In India, 90 million children go to school every year and there are 7.5 million new enrolments annually. Given that each preschool can accommodate maximum 200 students, around 30,000 preschools are required to meet the demand.

According to estimates, the Government invests three per cent of its GDP on education while consumers spend more than $40 billion on private educational institutions and services.