Sodhani Academy IPO: Is it a Trap Anxious?

Sodhani Academy Introduction

Sodhani Academy of Fintech Enablers, founded in 2009, specializes in providing training, consultancy, and learning services in the field of financial literacy and awareness. The academy offers a variety of courses, including short-term, long-term, expert, and upskilling and reskilling programs. Their training covers areas such as financial planning, fundamental analysis, technical analysis, stock market basics, and retirement planning

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Brief about Sodhani Academy

Summary of the business of Sodhani Academy

Sodhani Academy company engaged in the business of providing training, consultancy and learning services. Sodhani Academy focus area of service delivery has been under the domain of financial literacy and awareness. Financial literacy and awareness domain broadly refers to the knowledge and understanding of various financial concepts and skills that enable learners to make informed and responsible decisions regarding financial matters. It encompasses the ability to manage money effectively, budget wisely, save and invest prudently, and comprehend basic financial products and services. We believe a strong foundation in financial literacy empowers learners to navigate the complexities of the financial world, make sound financial choices, and plan for their future financial well-being. Our training, consultancy and learning services have majorly been focused in the areas of financial planning, fundamental analysis, technical analysis, basics of stock market and retirement planning.

Sodhani Academy History

Sodhani Academy Company was originally incorporated as ‘Sodhani Financial Consultants Private Limited’ as a private limited company under the provisions of the Companies Act, 1956, pursuant to a certificate of incorporation dated February 03, 2009 issued by the Registrar of Companies, Rajasthan, Jaipur. Subsequently, the status of the Company was changed to public limited and the name of our Company was changed to ‘Sodhani Financial Consultants Limited’ vide Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting of our Company held on March 09, 2023. The fresh certificate of incorporation dated April 10, 2023 was issued to our Company by the Registrar of Companies, Rajasthan, Jaipur.

Sodhani Academy Promoters & Board of Directors

• Sodhani Academy Promoters are Mr. Rajesh Kumar Sodhani and Mrs. Priya Sodhani.

Sodhani Academy Board of directors

Sodhani Academy Share Holding pattern

Sodhani Academy Strength

• Proven track record of our trainers;
• Brand Image
• Technology driven, Asset light and Scalable business model
• Focus on Practice and learning
• Diversified course offerings
• Pandemic Proof Model

Sodhani Academy Strategies

• Course Learner Satisfaction
• Brand building strategy
• Develop and expand our course content

Industry Outlook

Education is fundamental for achieving full human potential, developing an equitable and just society, and promoting national development. Providing universal access to quality education is the key to India’s continued ascent, and leadership on the global stage in terms of economic growth, social justice and equality, scientific advancement, national integration, and cultural preservation. Universal high-quality education is the best way forward for developing and maximizing our country’s rich talents and resources for the good of the individual, the society, the country, and the world.

India holds an important place in the global education industry. According to IBEF, EDUCATION SECTOR IN INDIA INDUSTRY REPORT, February 2023, the country has more than 1.5 million schools with over 260 million students enrolled and about 1,072 universities and 43796 colleges. India has one of the largest higher education systems in the world. However, there is still a lot of potential for further development in the education system. The Indian edtech market size is expected to reach US$ 30 billion by 2031, from US$ 700-800 million in 2021. According to KPMG, India has also become the second largest market for E-learning after the US.

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The online education market in India is expected to grow by US$ 2.28 billion during 2021-2025, growing at a CAGR of almost 20%. The market grew by 19.02% in India in 2021.

Market Size

According to IBEF, the education market in India is currently valued at US$ 117 billion and is expected to nearly double to US$ 225 billion by 2025. Currently, the school segment contributes 52 per cent to the education market in India, higher education contributes 15 per cent of the market size, text-book, e-learning and allied services contribute 28 per cent and vocational education in manufacturing and services contributes 5 per cent. Higher education system in India has undergone rapid expansion. Currently, India ‘s higher education system is the second largest in the world enrolling over 70 million students while in less than two decades, India has managed to create additional capacity for over 40 million students.

India will have the highest population of young people in the world over the next decade, and our ability to provide high- quality educational opportunities to them will determine the future of our country.

Digital Education Industry

Online education is learning that takes place over the Internet and may be defined as electronically supported learning that is based on the Internet for teacher-student interactions and the distribution of class materials. Online education in India offers a variety of course categories, including curriculum-based coaching, test preparatory coaching, higher education degree courses, reskilling and skill enhancement programs, and language and casual learning. Before the pandemic, online education was mostly preferred by non-traditional students – students who were working fulltime or raising families, though it was gaining popularity due to wider access to internet and lack of quality coaching centres in Tier-2/ Tier-3 cities.

Market size of digital education industry in India

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The digital education industry comprises companies providing multimedia content and digital hardware to aid teaching in private and Government schools, colleges, and training centres, and for personal usage as well as for corporates.

India is one of the leading countries in the online education sector. The Indian online education market is set to witness tremendous growth in the coming years. According to KPMG, India has become the second largest market for e-learning after the US. The market is poised to grow by USD 2.28 billion from 2022 to 2026 at a CAGR of 19.50%. By providing affordable and cutting-edge online education solutions to developed and developing countries, Indian growth will see a further increase.

Growth Drivers of Online Education

• Low-cost initiative: Online skill enhancement courses are more affordable than offline alternatives for many families, especially since most of them are freely available. Many prestigious universities and institutes such as Harvard University, Berkeley University of California, and Boston University facilitate online courses on numerous subjects. These courses are usually available on Massive Online Open Courses (MOOCS) which can be bought for free or with a minor fee.
• Offers quality education: The enrolments for open courses and distance learning in India are expected to increase to around 10 million by 2021 according to Netscribes. Areas that lack adequate options to pursue traditional education, witness higher adoption of online courses. States such as Bihar, Kerala, and Jammu and Kashmir account for 0.4mn distance learning enrolments.
• Government initiatives: Government initiatives such as SWAYAM, E-Basta, Rashtriya Madhyamik Shiksha Abhiyan (RMSA), Skill India and Digital India will make way for the infrastructure needed by students to study online. The government is also working on a National Open University for the dissemination of education to the masses. Apart from this, it is actively promoting digitization of education and ease of internet access.
• Increasing internet penetration: Currently, 409 million Indians have access to the internet but its steady growth, especially in semi-urban and rural areas, provides high potential for the proliferation of online education. Netscribes estimates nearly 735 million internet users in India by 2021. This internet penetration will enable reach and increase traffic for online education players.
• Increase in disposable income and a large fraction of the young population: Growing disposable income is egging the young population to enhance their skills for higher career and salary growth. Employment opportunities globally are tightening their qualifications, resulting in intense competition. This makes the young population with high aspirations but lower income, a good target market for online education. Further, the acceptability of online channels is also higher in the younger demographic.

FINANCIAL LITERACY

• The ability to read and write, and perform basic operations with numbers, is a necessary foundation and an indispensable prerequisite for all future schooling and lifelong learning. However, various governmental, as well as non-governmental surveys, indicate that we are currently in a learning crisis: a large proportion of students currently in elementary school – estimated to be over 5 crores in number – have not attained foundational literacy and numeracy, i.e., the ability to read and comprehend basic text and the ability to carry out basic addition and subtraction with Indian numerals.
• Attaining foundational literacy and numeracy for all children will thus become an urgent national mission, with immediate measures to be taken on many fronts and with clear goals that will be attained in the short term (including that every student will attain foundational literacy and numeracy by Grade 3). The highest priority of the education system will be to achieve universal foundational literacy and numeracy in primary school by 2025. The rest of this Policy will become relevant for our students only if this most basic learning requirement (i.e., reading, writing, and arithmetic at the foundational level) is first achieved. To this end, a National Mission on Foundational Literacy and Numeracy will be set up by the Ministry of Human Resource Development (MHRD) on priority. Accordingly, all State/UT governments will immediately prepare an implementation plan for attaining universal foundational literacy and numeracy in all primary schools, identifying stage- wise targets and goals to be achieved by 2025, and closely tracking and monitoring progress of the same.
• First, teacher vacancies will be filled at the earliest, in a time-bound manner – especially in disadvantaged areas and areas with large pupil-to-teacher ratios or high rates of illiteracy. Special attention will be given to employing local teachers or those with familiarity with local languages. A pupil-teacher ratio (PTR) of under 30:1 will be ensured at the level of each school; areas having large numbers of socio-economically disadvantaged students will aim for a PTR of under 25:1. Teachers will be trained, encouraged, and supported – with continuous professional development – to impart foundational literacy and numeracy.
• On the curricular side, there will be an increased focus on foundational literacy and numeracy – and generally, on reading, writing, speaking, counting, arithmetic, and mathematical thinking – throughout the preparatory and middle school curriculum, with a robust system of continuous formative/adaptive assessment to track and thereby individualize and ensure each student’s learning. Specific hours daily – and regular events over the year-on activities involving these subjects will be dedicated to encourage and enthuse students. Teacher education and the early grade curriculum will be redesigned to have a renewed emphasis on foundational literacy and numeracy.
• Currently, with the lack of universal access to ECCE, a large proportion of children already fall behind within the first few weeks of Grade 1. Thus, to ensure that all students are school ready, an interim 3-month play-based ‘school preparation module’ for all Grade 1 students, consisting of activities and workbooks around the learning of alphabets, sounds, words, colours, shapes, and numbers, and involving collaborations with peers and parents, will be developed by NCERT and SCERTs.
• A national repository of high-quality resources on foundational literacy and numeracy will be made available on the Digital Infrastructure for Knowledge Sharing (DIKSHA). Technological interventions to serve as aids to teachers and to help bridge any language barriers that may exist between teachers and students, will be piloted and implemented
• Due to the scale of the current learning crisis, all viable methods will be explored to support teachers in the mission of attaining universal foundational literacy and numeracy. Studies around the world show one-on-one peer tutoring to be extremely effective for learning not just for the learner, but also for the tutor. Thus, peer tutoring can be taken up as a voluntary and joyful activity for fellow students under the supervision of trained teachers and by taking due care of safety aspects. Additionally, it will also be made far easier for trained volunteers – from both the local community and beyond – to participate in this large-scale mission. Every literate member of the community could commit to teaching one student/person how to read, it would change the country’s landscape very quickly. States may consider establishing innovative models to foster such peer-tutoring and volunteer activities, as well as launch other programmes to support learners, in this nationwide mission to promote foundational literacy and numeracy.
• Enjoyable and inspirational books for students at all levels will be developed, including through high-quality translation (technology assisted as needed) in all local and Indian languages, and will be made available extensively in both school and local public libraries. Public and school libraries will be significantly expanded to build a culture of reading across the country. Digital libraries will also be established. School libraries will be set up – particularly in villages – to serve the community during non-school hours, and book clubs may meet in public/school libraries to further facilitate and promote widespread reading. A National Book Promotion Policy will be formulated, and extensive initiatives will be undertaken to ensure the availability, accessibility, quality, and readership of books across geographies, languages, levels, and genres.
• Children are unable to learn optimally when they are undernourished or unwell. Hence, the nutrition and health (including mental health) of children will be addressed, through healthy meals and the introduction of well-trained social workers, counsellors, and community involvement into the schooling system. Furthermore, research shows that the morning hours after a nutritious breakfast can be particularly productive for the study of cognitively more demanding subjects and hence these hours may be leveraged by providing a simple but energizing breakfast in addition to midday meals. In locations where hot meals are not possible, a simple but nutritious meal, e.g., groundnuts/chana mixed with jaggery and/or local fruits may be provided. All school children shall undergo regular health check-ups especially for 100% immunization in schools and health cards will be issued to monitor the same.

Introduction: Financial Literacy – Prevalence Pattern of Components

As can be seen, the term Financial Education and Financial Literacy are not the same, these are related concepts. People achieve Financial Literacy through the process of Financial Education. The achievement of Financial Literacy empowers the users to make sound financial decisions which result in financial well-being of the individual

Financial education plays a vital role in creating demand side response to the initiatives of the supply side interventions. Financial education initiatives by concerned stakeholders will help people achieve financial well-being by accessing appropriate financial products and services through regulated entities. These efforts will be guided by the National Strategy for Financial Education (NSFE). Incidentally, financial education also supports achievement of Sustainable Development Goal

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India has made tremendous progress in bringing its citizens into the formal financial system over the last many years. Since India’s first NSFE was released in 2013, there have been many developments in the financial inclusion scenario of the country.

Background and Rationale of National Strategy of Financial Education

India has a large population of adults. This demographic advantage can be leveraged to ensure that India becomes one of the fastest growing economies, with emphasis on inclusive growth through a vibrant and stable financial system. Since a large number of stakeholders, including the Central and State governments, Financial Sector Regulators, financial institutions, civil society, academia, educational institutions in public and private sector and others are involved in spreading financial literacy, a broad National Strategy for Financial Education (NSFE) is a pre-requisite to ensure that they work in tandem and their work is aligned to the overall Strategy on financial education and not at cross purposes. In recent years, it is increasingly being recognized that Nation-wide financial literacy can be achieved only through a multi-stakeholder approach wherein different stakeholders viz. Government, Financial Sector Regulators, Financial Service providers are involved to achieve the objective.

Importance of Financial Literacy in India

Financial literacy is one of the biggest assets of any country as it is directly proportional to the economic growth. The significance of financial literacy in India are as follow:

• Development of rural areas: Reaching out to rural sections and working on their development can be achieved through financial literacy. This can be achieved by making people more aware about the available resources and right way of utilizing them.
• Ease in borrowing: Based on an RBI study, 42.9% of population borrowed money from informal sources and pay higher interests. A strong financial education can help small traders make informed decisions and make the best use of available resources.
• Growth of MSMEs: As per IBEF MSMEs contribute to 29% of India’s GDP with 50% of the exports coming from this sector. Financial literacy can help small businesses grow and even bring new businesses to the market.
• Surge in equity market investors

Retail participation in the Indian stock market has increased dramatically over the last two years, as more first-time investors have shifted their focus from traditional means of investing and entered the stock market in search of higher returns. The pandemic-caused lockdown and subsequent work-from-home with high internet penetration fuelled their enthusiasm even more. Between April and November 2021, the two depositories, Central Depository Services (CDSL) and National Securities Depository (NSDL) added 28.6 million new accounts.

Impact of social media on financial literacy

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Social media has a huge impact in spreading financial literacy in India. It was one of the biggest influencers of rise in investment during the pandemic. Many stock market training academies, YouTube channels and websites were founded during this period. As per IBEF, the top 15 Indian YouTube channel focusing on equity markets have a subscriber base of more than 13 million. An increase in internet penetration and popularity of these mediums, triggered a rise in popularity of investment across India. Many people from different age groups began investing in equity markets and mutual funds.

Sodhani Academy Business Data

Sodhani Academy Verticals

• Personal Finance
• Investment and Portfolio Management
• Basic Financial Planning
• Basic Banking and Financial Services knowledge
• Financial Literacy for Youth and Women
• Corporate Training
• SIP Education & Awareness:

Sodhani Academy Product wise break-up

A significant portion of our operating revenue is derived from our business of learning, training and consultancy activities. Failure to attract potential learners in our courses due to factors, including but not limited to an unsatisfactory success ratio, may adversely affect our revenues, business, results of operations and prospects.

Competition

Financial Markets and Training industry being a growing and global industry, we face competition from various domestic and international players. The industry which we cater to is highly competitive, unorganized and fragmented with many small and medium – sized companies and individual professionals/trainers. We compete with organized as well as unorganized sector on the basis of availability of range of courses.

Peer companies comparison

• company operating in the Education and Financial Literacy Industry but there are no listed companies that are engaged in the business exactly similar to ours.

Sodhani Academy SWOT ANALYSIS

• Strengths
  • Proven Track Record: With over a decade of experience since its founding in 2009, Sodhani Academy has established a strong reputation in financial education and literacy.
  • Recognized Brand: The academy is well-known for its quality training programs, which cater to a diverse audience including students, recent graduates, and homemakers.
  • Technology-Driven: The academy employs a technology-driven, asset-neutral, and scalable business model, which allows for efficient and widespread delivery of its programs.
  • Practice-Oriented Teaching: Emphasis on practical, hands-on learning ensures that participants gain applicable skills and knowledge.
• Weaknesses
  • Limited Physical Presence: While the academy has a strong online presence, its physical training facilities are limited, which might restrict its reach to audiences preferring in-person learning.
  • Dependence on Trainers: The quality of training heavily relies on the expertise of individual trainers, which can vary and affect the consistency of the learning experience.
• Opportunities
  • Expansion through IPO: The upcoming IPO provides an opportunity to raise funds for expanding content studios, procuring IT hardware, and enhancing branding efforts.
  • Growing Demand for Financial Literacy: Increasing awareness about financial literacy and the need for financial planning presents a significant growth opportunity.
  • Partnerships and Collaborations: Forming strategic partnerships with educational institutions and financial organizations can help broaden the academy’s reach and impact.
• Threats
  • Market Competition: The financial education sector is becoming increasingly competitive with many new entrants offering similar services.
  • Economic Fluctuations: Economic downturns can affect individuals’ ability to invest in educational programs, potentially impacting enrollment numbers.
  • Regulatory Changes: Changes in educational regulations and financial policies could pose challenges to the academy’s operations and program offerings.

Sodhani Academy Business risk factors

• A significant portion of our operating revenue is derived from our business of learning, training and consultancy activities. Failure to attract potential learners in our courses due to factors, including but not limited to an unsatisfactory success ratio, may adversely affect our revenues, business, results of operations and prospects.
• Strong competition in the business of providing financial literacy courses could also decreaseour market share and compel us to reduce course fees or provide higher discounts on our course fees. This may have a material adverse impact on the number of learners enrolled with us, revenues and profitability.

Sodhani Academy Financials

Sodhani Academy Key Financial Ratios

Sodhani Academy Key Performance Indicators

Sodhani Academy Assets & Liabilities

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Sodhani Academy Profit & Loss

Sodhani Academy Cash Flow

Sodhani Academy Capital structure

IPO Details

Sodhani Academy of Fintech Enablers IPO Details

Object of the issue

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Litigation involved in Sodhani Academy

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