The Indian education sector is optimistic

NEW DELHI: For the fiscal year 2024-25, India Ratings and Research (Ind-Ra) has maintained its positive outlook for the education sector. Two main factors support this optimistic outlook such as the steady increase in student enrollment and the upward trend in tuition fees per student. The agency predicts that increasing middle-class incomes and growing demand for quality education will result in increased investment in infrastructure development and the implementation of state-of-the-art facilities in educational institutions.
        Ind-Ra trusts that the rising importance of digitalization, distance learning mode, and e-learning content will be a main factor in the Indian education space. The rating agency opined that developing and reorganizing group structures in the Indian education sector, increasing private equity financing opportunities and many other government initiatives will continue to drive the sector’s growth in 2024-25 and 2025-26. He also believes that foreign direct investment from private equity and venture capital players has a huge potential to inspire the Indian education market.
     Despite the challenges and regulatory complexities in the Indian education space, the sector has attracted significant foreign investment (CAGR: 7.76%) between 2012-13 and 2022-23. Ind-Ra expects the revenue base of educational institutions to increase because of the increase in tuition fees per student, which has not been changed during the COVID-19 pandemic. However, many institutions have not changed their fees following the COVID-19 pandemic because they operate mainly as not-for-profit entities.

    Ind-Ra has upgraded its Outlook for 2024-25 to Positive from Stable for educational institutions in its portfolio as enrollments are expected to increase because of the increased demand for courses which is offered by these institutions. In 2023-2024 Ind-Ra-rated educational institutions recorded more student enrollment, which is most likely to continue in 2024-2025. Many assessed educational institutions have exceeded pre-Covid levels in terms of employment. As a result, their revenue base also improved in 2023-24, and are likely to see further growth in 2024-25.