• The JSBF Report

COVID-19 Outbreak and its Impact on Equities of Education Sector

By- Sainav Anand


source - analytics insight


We all are familiar with the recent covid-19 outbreak and its impact on various sectors, How it has changed the whole environment of the market and how it has changed the way we use to live, It has a great impact on our day to day living employees don’t go to offices for work they prefer working for home, students don’t go to school the whole education system has shifted towards an online mode of teaching and all the business operation are very badly affected


With all the negativity aside great minds always think for an opportunity even in a situation of disaster we all know that the education sector is badly affected as students can’t go to school and colleges but if we look at the other side this shift can lead to a great scope for online mode of teaching specially for the Edtech startups and companies operating in this online mode of teaching for very long have a great opportunity of expansion and increasing their market size and investing in companies like these can give us great returns in future and the fact that some existing companies already hold a large part of the market share in this sector and can go very long because to some extent they can also provide cheap services to the customers as there is no great operating cost involved in their business,Investing in equities of these companies can turn out to be a game-changer, The online education market in India is expected to grow by USD 2.28 billion and record a CAGR of 20% during 2021-2025. – [1]


One of the leading company in terms of market share and capitalization is BYJU’S with a market capitalization of $13 billion - [2] it is India’s most valuable Edtech startup and recently BYJU’s has acquired tutorial chain Aakash Education Services Ltd(AESL)in a cash and stock deal estimated at $950 million-[3], sealing it’s largest buyout this is the recent upside catalyst backing the idea of investing in this company,


Online education has a wider scope which is not limited to school and university, Even in the area of freelancing it can add great value we all know that there is no age for learning anything, even the existing employees have started learning new skills on platforms like udemy and Coursera to either follow their passion or to enhance in their career-[4]


, The only challenge or risk for this online teaching business soon is that it is a new concept for rural India and most of the people might not find themselves comfortable with this new method and many children do not have any access to laptop or mobiles and even if they have they don’t find themselves comfortable with this mode of teaching, To mitigate this risk many online teaching companies have started a campaign where they encourage others to donate their mobiles and laptops which is no more of their use they have also started to collect fund to provide mobiles and laptops to poor children-[5] and even Government of many countries have supported this initiative and to make children comfortable these companies have started giving basic tutorials on how to operate mobiles and laptops to increase the participation of children in these online classes, soon many of these big online teaching companies like BYJU’s are planning to go public- [6] and investing in the equities of these companies can turn out to be a game-changer and can give good returns to the investors.


Sainav Anand is a first-year B.Com(Hons.) student at JSBF. You can check his profile on LinkedIn.




References

[1]- growth in online education sector https://www.technavio.com/report/online-education-market-in-india-market-industry-analysis#:~:text=The%20online%20education%20market%20in,20%25%20during%202021%2D2025


[2]-BYJU’s market cap- https://www.moneycontrol.com/news/business/byjus-to-enter-league-of-giants-with-estimated-valuation-reaching-new-high-check-out-the-list-here-6838621.html


[3] – BYJU’s acquiring Akash – https://economictimes.indiatimes.com/tech/startups/byjus-to-acquire-aakash-educational-services-in-700-million-deal/articleshow/81910598.cms


[4]-employees learning new skills

https://about.udemy.com/udemy-news/2021-workplace-learning-report-the-skills-defining-the-future-of-work/


5-BYJU’S giving free laptops and mobiles to poor children https://byjus.com/give/

6 Edtech companies going public-

https://www.moneycontrol.com/news/business/ipo/byjus-plans-to-go-public-in-18-24-months-founder-raveendran-6734061.html

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