Jaro Education to allocate Rs 81 crore for marketing from Rs 570 crore IPO filing

New Delhi: Jaro Institute of Technology Management and Research (Jaro Education) has filed its preliminary papers with Sebi for an initial public offering of Rs 570 crore, a statement said on Monday.

The company has proposed to utilise the IPO proceeds of Rs 81 crore for marketing, brand building and advertising activities.

In FY2024, the company invested Rs 54.45 crore in advertising and marketing, compared to Rs 35.94 crore in FY2023 and Rs 23.40 crore in FY2022.

In its draft red herring prospectus, the company said, “We plan to continue to undertake marketing, brand building and advertising activities to increase our Learner enrolment rates, course completion rates and to increase the scalability of our business. Our strategy is oriented to not only augment enrolments and optimise lead generation and conversion in the short-term, but also to cement our market presence and brand image, ultimately driving sustainable growth and reducing reliance on high marketing and advertising spends.”

It has also proposed to use Rs 48 crore for prepayment or scheduled repayment of a portion of certain outstanding borrowings availed by the company and the rest for general corporate purposes.

Nuvama Wealth Management, Motilal Oswal Investment Advisors, and Systematix Corporate Services have been appointed as book-running lead managers, while Bigshare Services is the registrar to the IPO.

Promoter Sanjay Namdeo Salunkhe is selling equity shares worth Rs 400 crore through the OFS route.

Promoters and promoter group entities hold an 85.03% stake in the company, while public shareholders hold the rest 14.97% stake.

Salunkhe holds a majority 78.2% stake in the company, according to the draft red herring prospectus (DRHP).

The company, in consultation with the book-running lead managers, may consider a pre-IPO placement, aggregating up to Rs 34 crore.

If such placement is completed, then the fresh issue size will be reduced, said the company.

Jaro Education was established in 2009 by Sanjay Salunkhe, who is also the chairman and managing director of Jaro Institute.

The institute offers technology-driven degree programmes and certification programmes in collaboration with its partner institutions to students as well as C-Suite personnel.

As of March 31, 2024, Jaro Education has over 22 offices-cum-learning centres across major cities for offline learning, apart from 15 tech studio set-ups in the campuses of various IIMs.

It caters to a total of 34 partner institutions such as IITs, IIMs and global institutions such as Swiss School of Management and Rotman School of Management, University of Toronto.

In FY24, the organisation reported an operational revenue of Rs 199 crore, a 63% increase compared to FY23.