Shares of Online Higher-Ed & Upskilling Play Company Get Listed on BSE & NSE at IPO Price

On Tuesday, shares of Jaro Institute of Technology Management & Research Ltd (Jaro Education) marked their debut on stock exchanges, that is BSE and NSE. On BSE, the stock is listed at Rs 890 per share and on NSE, the stock is listed at Rs 890 per share. The IPO was oversubscribed 23.20 times overall. The QIB portion saw the highest subscription at 37.19 times, followed by retail investors at 9.15 times and Non-Institutional Buyers (NIIs) at 37.32 times.

Jaro Education's Business Model and Financial Growth

Jaro Institute of Technology Management & Research Ltd (Jaro Education) was founded in 2009 and focuses on online education, partnering with top institutions such as IIT Delhi, IIM Mumbai and the University of Toronto. It uses an asset-light aggregator model to acquire learners and manage delivery. Financially, the company has shown strong growth, with Revenue from Operations increasing from Rs 122.10 crore in FY23 to Rs 252.30 crore in FY25. Over the same period, its Net Profit jumped from Rs 11.65 crore to Rs 51.70 crore. Its profitability is high, maintaining an EBITDA Margin of approximately 33 per cent and a Net Profit Margin of about 20 per cent in FY24 and FY25.

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IPO Details and Market Opportunity

The company's Initial Public Offering (IPO) is an issue size of Rs 450 crore, with a price band set between Rs 846 and Rs 890 per share. The company will use the fresh issue proceeds for three main areas: Rs 81 crore is earmarked for marketing and brand building and Rs 45 crore will be used to prepay or repay existing borrowings. The IPO is timed to capture rapid growth in India’s online education sector. The overall domestic higher education market is projected to grow from Rs 56 lakh million in FY2024 to Rs 90 lakh million by FY2028, a CAGR of 12.6 per cent. The online segment is expected to nearly double, rising from Rs 3.8 lakh million to Rs 8.5 lakh million over the same period, with a CAGR of 22.2 per cent.

Valuation and Key Financial Risks

Based on FY25 earnings, the IPO is priced at 38.2x P/E and 24x EV/EBITDA. This valuation is higher than peers like NIIT Learning Systems, but Jaro justifies it with superior returns, including a high Return on Net Worth (ROE) of 35.8 per cent and Return on Capital Employed (ROCE) of 39.9 per cent. The primary financial concerns for the company are its negative operating cash flows, which stood at -Rs 23.46 crore in FY25 and a growing level of Receivables, which increased to Rs 36.22 crore in FY25. These factors highlight a weakness in working capital management despite its strong profitability metrics.

Disclaimer: The article is for informational purposes only and not investment advice.