Veranda Learning Solutions pre-closes two loans worth ₹220 crore

Chennai-based education technology company Veranda Learning Solutions Ltd had pre-closed two loans worth ₹220 crore that were procured from two large corporate groups to fund two acquisitions. While the transactions happened in Q4 of last fiscal, the payouts happened in April. There was a one-time pre-closure cost of ₹9 crore during the June quarter, said the company’s Executive Director and Chairman, Suresh Kalpathi.

• Also read: Veranda Learning targets ₹600 crore revenue through institutional partnerships

The loan from Hinduja group was used to finance JK Shah Education’s acquisition (₹338 crore for 76 per cent stake) of about ₹100 crore in October 2022. In September 2023, a loan was procured from Piramal group of around ₹120 crore for chiefly the acquisition of managed schools, he told businessline.

In the June quarter, the company reported a higher net loss of ₹25 crore as against ₹19 crore in the corresponding quarter of last year. This was on a 73 per cent increase in revenue to ₹119 crore (₹69 crore). The higher net loss was due to higher finance cost and depreciation cost. Finance cost for the quarter stood at ₹30 crore. This includes ₹9 crore cash interest paid on the Non-Convertible Debentures (NCDs) issued, and non-cash expenses of ₹13 crore pertaining to the unwinding of acquisition-related liabilities and accrued premium on the NCDs issued.

The finance cost was mostly higher interest cost at 17.5 per cent to Barings PE for acquisition-related financing. This will be replaced by low cost debt or closed from earnings progressively, Suresh said.

• Also read: We will continue to explore new acquisitions, says Veranda Learning’s Suresh Kalpathi

The depreciation cost for the quarter includes non-cash expense of ₹13 crore arising out of amortisation of intangible assets pertaining to the acquisitions completed, he added.

Founded in 2018 by the Kalpathi AGS Group, Veranda offers a bouquet of training programs for competitive exam preparation, including State Public Service Commission, Banking, Insurance, Railways, IAS, and CA, and various professional skilling and upskilling programmes.

In the June quarter, the company achieved an EBITDA of ₹28 crore, up significantly from ₹5.64 crore reported in the same quarter last year. The total number of students trained by the Veranda Group for Q1 FY25 stood at 1.13 lakh, says a release.

“This quarter’s performance is a clear indication that our focus on building sustainable and profitable operations is on the right track. We are steadfast in our goal to achieve a revenue target of ₹600 crore in FY25, a milestone that reflects our commitment to excellence and our confidence in the sector’s potential,” said Suresh. In FY24, the company reported revenue of ₹362 crore.

During the June quarter, Veranda K-12 and Cambridge expanded their partnership to introduce educational programs in Eastern India. Veranda XL Learning Solutions and Sri Krishna Arts and Science College in Coimbatore signed a MoU to offer a B. Com course with the added benefit of ACCA (Association of Chartered Certified Accountants) accreditation.

At the time of filing this report, the company’s stock price on the NSE was trading at ₹291, up by 1.54 per cent.