Ansals eye school biz

Downturns in industries can often make companies think afresh and make them seek new frontiers of business. It now seems to be happening in the realty business, reports Sandeep Singh.

Downturns in industries can often make companies think afresh and make them seek new frontiers of business. It now seems to be happening in the realty business.

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With an eye on diversification, the Delhi-based Ansal Group has laid down plans to go big on education, broadening the emphasis from offices and homes to think of school buildings to serve the education sector, which along with healthcare is a high-growth industry serving a demographic explosion as hundreds of millions of children seek learning opportunities.

The promoters of Ansal API have rolled out an ambitious plan to construct and lease 50 schools in a period of five years at an investment of around Rs 750 crore.

“We believe that there will be a demand for good schools over the next 10 to 15 years and it will also help us in diversifying our business,” said Pranav Ansal vice-chairman and managing director, Ansal API.

The Ansals expect the schools to generate a stable revenue for it as its schools that have begun operations are generating a rate of return of 20 per cent per annum.

Even though Ansal’s have been present in the school business for around 30 years now, Pranav Ansal feels that it is the sunrise sector in India as there is a big gap between the demand of supply of good schools.

“We will get consistent revenue in rentals and will also have profit sharing after a period of five years of the beginning of the operation,” added Ansal.

The company already has four schools leased out to service provider Educomp and one school to the Middle East based school operator GEMS Education.

“We are in talks with several operators that include names like Shriram, Zee and several others,” said Ansal.