Educomp has acquired a 50% stake in EuroKids for Rs39 crore. As per the agreement the agreement Educomp’s stake can be increased up to 74% over a period of time.
EuroKids is a chain of pre-schools running on franchisee model and has more than 450 centers pan India. The company has plans to scale up the number of centers to around 1,000 in next three years for which it required capital.
The venture is expected to be positive for Educomp. We recommend ACCUMULATE on the stock with a target price of Rs3,902.