Investors heavily discounted the valuation of the demerged education business of Zee or Essel Group. Zee  Learn, the education business of the group housed under ETC Networks (the firm that was merged with Zee Entertainment recently) that was demerged as part of a two-tiered restructuring, listed on Monday with a pretty volatile price pattern.

At NSE, the scrip opened at Rs 296 but crumbled thereafter and at BSE it opened at Rs 73.95 and is trading around Rs 20 in the final hour of debut day. The company commands a market cap of around Rs 250 crore currently.

The media group, that had few years ago seen through a demerger of its key units leading to birth of three new separate listed companies, Zee News, Dish TV and Wire & Wireless India Ltd (WWIL) as offshoot of its flagship firm, early this year merged ETC Networks with Zee Entertainment. ETC brought regional television and music channels to Zee Entertainment, which houses the entire entertainment programming business of the group.

However, the key aspect of this restructuring was floating the education business as a separate firm. The education business was under Zee Interactive Learning Systems which was brought under ETC Networks three years ago. The shareholders of the flagship firm Zee Entertainment were allotted one share of Zee Learn for every shares held by them in Zee Entertainment.

In FY’09 out of ETC Network’s total standalone revenues of Rs 66 crore, two thirds was from broadcasting with the education business contributing around Rs 25 crore. The education business was in losses that year.

Zee Learn runs India's largest chain of pre-schools under brand Kidzee with more than 700 pre-schools in more than 300 cities after entering the segment in 2003. During the current fiscal Kidzee has seen enrollment of more than 36,000 students.

The company also acts as a consultant to local entrepreneurs who wish to setup K-12 schools, under its brand name Mount Litera Zee Schools. Launched in December 2008, 50 schools were signed up under Mount Litera Zee Schools in the first year and it has further expanded to 75 schools.

Zee Learn also plans to launch a chain of premium preschools called Mount Litera World Preschools. These pre-schools would be company owned or joint ventures with progressive individuals or entities.

The firm also operates vocational education under Zee Institute of Media Arts (ZIMA) and Zee Institute of Creative Art (ZICA). While ZIMA is a TV and film training institute in Mumbai, ZICA is classical and digital animation training academy.

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