Chennai-based education support services company EdServ Softsystems Ltd has said on Monday that the country’s leading Hindi daily Dainik Bhaskar has acquired 2.7 per cent stake in the company. Under this deal, EdServ will get advertisements worth Rs 15 crore over the next three years.
“The Hindi daily is investing Rs 15 crore for 2.7 per cent stake in EdServ through the issue of fully convertible equity warrants, which will be converted over the next 18 months,” S. Giridharan, chairman and CEO of EdServ, told VCCircle.
“Dainik Bhaskar will help us expand nationwide because of the newspaper’s reach in northern and western India. In fact, this will enable us to attract more students, schools and corporate houses because of the advertisements we will be publishing in the newspaper,” he added.
Shares of EdServe Softsystems closed at Rs 90.45 per unit on the BSE, down 3.98 per cent from the previous close.
EdServ had previously diluted stake to various ad-for-equity media investors including HT Media and Bennett, Coleman & Co. Ltd. In November 2010, Dainik Jagran – India’s third largest daily – had also picked up a small stake in the company by way of conversion of warrants to the tune of Rs 10 crore.
In June 2011, EdServ Softsystems said that it was looking to raise up to $35 million through a GDR (global depositary receipts) issue to fund its expansion plans. The firm plans to expand its e-learning presence to overseas markets, with focus on schools (K-12), CA courses, international test preps, IT skills training and personality development.
The company has also tied up with EducationAndhra.com, a Hyderabad-based portal featuring educational resources and offers its online courses for IIT JEE, AIEEE, CA & IT training to the registered users of the portal. Through this tie up, EdServ plans to grow its user base to more than 3.5million students.
“With Andhra Pradesh emerging as a major destination for integrated IIT coaching, students are looking for more resources and also opting the eLearning platform to become better equipped. We believe that this tie-up will help us expand our student base in AP and also achieve a faster penetration for our online Test Prep course,” Giridharan commented on the deal.
The education service company has also tied up with Nokia to provide its educational content on Nokia smartphones – so that students can access its wide range of content through the HumThum apps.