Crizac Limited (Neutral)

Highlights

Crizac Limited (CRIZAC), incorporated in 2011, is a B2B education platform for agents and global institutions of higher education offering international student recruitment solutions to global institutions of higher education in United Kingdom, Canada, Republic of Ireland, Australia and New Zealand (ANZ).

They sourced applications for enrollment into global institutions of higher education from over 75 countries through agents globally who are registered on proprietary technology platform. During the last 3 years, they processed over 0.71 mn student applications while working with over 173 global institutions of higher education.

CRIZAC addresses the lack of awareness of the admission criteria of various global institutions of higher education. They address this by aspect through proprietary technology platform who enables agents to better understand the admission criteria & the complex process of admissions across various global institutions of higher education.

The company functions as the single-point-of-contact for global institutions of higher education, which facilitates seamless management of the admission process. Their team verifies and vets the applications uploaded by the agents by leveraging proprietary technology platform and filters the applications based on the criteria and suitability metrics specific to each institution.

Out of the total proceeds of Rs. 8,600 mn, entire ~Rs. 8,600 mn would go towards existing selling shareholders of the company. The company expects that the proposed listing of its Equity Shares will enhance their visibility and brand image.

Key Highlights

• The global education market, valued at approximately USD 6 trillion in 2024, is projected to grow to around USD 7.4 trillion by 2030. Total Indian students pursuing higher education abroad increased to about an estimated 1.48 mn by 2023. The total number of Indian students studying abroad is expected to reach 2.5 mn by 2030 growing at a CAGR of 7.8 pct over 2023 – 2030.

• Student recruitment solutions from India into the United Kingdom is their strength as a result of strong relationships built over time with global institutions of higher education in the United Kingdom. The number of inbound students from India into United Kingdom has increased at a CAGR of 54.09 pct between CY19 and CY24.
• The company will continuously seek to deepen ties with existing agents and increasing the number of agents who avail of services. Further, they propose to augment network of agents in China. India and China are the top 2 sources of students going abroad for education and accounting for ~40 pct of the total international higher education expenditure.
• CRIZAC proposes to provide guidance on available financial aid options and engaging in other aspects which form a part of the international study eco-system such as (i) student loans and foreign exchange facility for which they are proposing to enter into tie-ups with financial institutions, (ii) Visa application assistance, and (iii) accommodation for which CRIZAC will enter into tie-ups with property management services and accommodation providers across focus geographies.
• CRIZAC’s key growth strategies include (i) Deepening and augmenting agent network in India and globally (ii) Expanding geographic footprint with a particular focus on expanding network of global institutions of higher education in Ireland, Canada and ANZ and establishing relationship with global institutions of higher education in the USA (iii) Diversify service offerings (iv) Enhance brand profile including online presence and implement more efficient marketing strategies (v) Inorganic growth to foray into B2C (i.e., catering directly to the student population without an agent in between) business model (vi) Enhancing proprietary technology platform.
• The company’s sales grew at a CAGR of ~34.72 pct for FY23-25 while EBITDA and profit grew 40.84 pct and 16.78 pct CAGR over same period. In FY25 sales of the company jumped 33.81 pct YoY to Rs. 8,495 mn. EBITDA came at Rs. 2,128 mn grew 193 pct YoY. During FY25 the company reported profit of Rs. 1,529 mn which grew 28.62 pct YoY.

Key Risk

• The company might face client concentration risk as 52 pct of FY25 sales comes from Top 3 global institution of higher education. Any loss of these clients can impact sales of the company.
• Any change in the regulations or legislations in relation to Visa from foreign countries or restriction on travel could adversely affect business of CRIZAC.
• If the students and/or agents are involved in Visa fraud or illegal immigration or if the students, agents and / or global institutions of higher education are involved in illegal admission then CRIZAC may be accused of aiding or abetting these offences, which could have a material adverse effect on their reputation and business.
• CRIZAC business operations are seasonal in nature. Key intakes which are currently relevant to them occur during the months of January/February, April/May and September/October.

Financial Performance

Valuation

CRIZAC was created with the objective of bridging the gap between the vast network of agents and universities across the globe. They simplify the application and admission process by bringing channel partners and institutions together on a single platform. At the upper end of the price band of Rs. 245, the issue priced at PE of 28.04x of FY25 earnings post issue. The issue appears to be fully priced.

Disclaimer: The views shared in blogs are based on personal opinions and do not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Advisor before making any investment using the app. Investing using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.