Everonn’s Centum buyout may affect NSDC’s target2 min read . Updated: 23 Aug 2012, 10:51 PM IST
Education firm's target for providing training under national scheme rises to 26.57 million as a result of acquisition
Everonn Skill Development Ltd, a subsidiary of Everonn Education, that is the largest partner of National Skill Development Corporation (NSDC) and has a target of training 15 million people by 2022, hasn’t achieved even half the number of its first year’s target, according to two government officials familiar with the matter who did not want to be identified.
Centum Learning’s subsidiary Centum Work Skills India has an agreement with NSDC to train around 11.57 million more. Everonn will now have a target to train 26.57 million people, nearly 18% of NSDC’s objective of training 150 million.
A spokesperson of Everonn declined to comment.
An NSDC spokesperson would only say the corporation is “observing" the situation. NSDC itself has a 27% stake in Centum Work Skills (the rest is held by Centum Learning). The spokesperson was also silent on how NSDC would treat the loan it has given Centum Work Skills.
“The question is whether Everonn will train 15 million now or 26.57 million. Does it have the capability to do so?" asked one of the government officials cited in the first instance.
According to the annual report of NSDC, its partners including Everonn trained around 181,000 people till 31 March. Everonn alone had a target of training 315,000 people in 2011-12, according to the information on NSDC’s website. The total number of people trained by NSDC’s partners till 31 July was 246,914.
“This figure shows that many partners have not fared well. With the largest partner (of NSDC) acquiring the second largest partner, a lot of focus will be on Everonn and how it performs," the second government official said. This person added that Everonn’s failure to do this could raise questions about the functioning of NSDC itself.
On Wednesday, the Bharti group exited the training business.
“Everonn will, subject to the receipt of the necessary regulatory approvals, acquire all of the issued and paid-up share capital of Centum," the two companies said in a statement.
Rakesh Bharti Mittal, chairman of Centum till Wednesday, said in the statement the transaction was in line with “our stated objective of focusing our energies on our core businesses through which we are making a deeper impact both in India and abroad".
“With this acquisition, Everonn will expand its reach in the Indian training space" by adding corporate training, the flagship product of Centum, as a new business segment, while other segments of Centum will integrate with the existing businesses of Everonn, the Chennai-based education firm informed stock exchanges. Neither Centum nor Everonn disclosed the buyout price.
The filing to the exchanges said that “in consideration of the acquisition of Centum, the Bharti family office will receive a combination of cash and equity shares in Everonn. The Bharti family office manages investments made by promoters of the Bharti group in their personal capacity".
The acquisition is among the first positive news to come out of Everonn, whose co-founder P. Kishore was arrested for allegedly trying to bribe a tax official in August 2011.
Shares of Everonn ended the day’s trade at ₹ 175.35, up 3.7%, on BSE. The broader market ended at 17,850.22 points, a marginal 0.02% rise.