Crizac
IPO Size: Rs. 860 cr, Entirely Offer for Sale (OFS)
- By promoter (100% stake to drop to 80% post IPO)
Price band: Rs. 233-245 per share
M cap: Rs. 4,287 cr, implying 20% dilution
IPO Date: Wed 2nd Jul to Fri 4th Jul 2025, Listing Wed 9th Jul 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Tech Platform for Higher Education Industry
Crizac is a 14 year old B2B technology platform provider, connecting higher education universities and agents (counsellors sourcing international students), earning referral fee from university on student enrolled. As of 31.3.25, company had 2,948 active agents across 25 countries (60% in India) using its platform, catering to 173 universities in UK, Canada, Ireland, Australia, New Zealand, although 95% revenue came from UK universities.
Topline and Agent Count Double in 2 years
Between FY22 to FY24, revenue nearly doubled from Rs. 473 cr to Rs. 849 cr, as number of active agents more than doubled from 1,819 to 3,948 during this period. This growth led by tripling of active agents outside India (especially South Asia and Africa), from 580 in FY23 to 1,711 in FY25.
High Margin Business
Being a technology business, company enjoys high operating leverage, with Operating Margin of 25% and Net Margin of 18%. Operating margin increased from 22.7% in FY23 to 25.1% in FY25 partly due to savings in software charges. In Dec 2023, company purchased proprietary software from group company for Rs. 104 cr, to save on software charges (Rs. 47 cr and Rs. 21 cr in FY23 & FY24 respectively). Although this increased depreciation and amortization expense to Rs. 42 cr in FY25, from Rs. 10 cr in FY24, as amortization rate is 45% on software.
FY25 PAT stood at Rs. 153 cr, with 30% RoE on networth of Rs. 505 cr and cash equivalents of Rs. 311 cr.
Few Risks
- Company generates 50%+ revenue from 3 universities
- Applications processed by company from India dropped 14% YoY to 1.6 lakh, from 1.9 lakh in FY24, due to industry-wide drop in student applications to UK, on forex and stricter visa rules
- Independent Director Khusboo Sethia resigned from the company exactly in 1 month of appointment on 14.2.24
Growth Drivers
In May 2024, it acquired Raj Consultants FZCO, a UAE based student recruiter for US universities, for Rs 9.5 cr, diversifying to a new geography and reducing dependence on UK. This also diversifies India-to-UK corridor, currently comprising 60% of company revenue, as a new source market of UAE opens up.
Company plans to continue to deepen agent networth in Africa and enter China, while expanding ties with universities in US, Australia and New Zealand. Foreign universities setting up campus in India is also positive (potential inflow of South Asian and African students), as company’s platform is geography-agnostic.
Education is a recession-proof industry, and international higher education remains aspirational and sometimes viewed as necessity among growing middle-class in emerging markets of India, Kenya, Vietnam.
Unique Business
Based on FY25 EPS of Rs. 8.7, IPO is priced at a historic PE multiple of 28x, and a PE of 24x, on FY26E EPS of over Rs. 10, which are attractive for high-cash generating, asset-light and fast-growing business.
B2B tech company Indiamart Intermesh is mentioned as peer in RHP, trading at 29x PE, despite 34% of profit earned from treasury, as against 17% of Crizac’s profit coming from treasury earnings. B2B travel company TBO TEK is trading at a PE of 62x. Given Crizac unique and novel business in Indian listed space, with high growth visibility, we believe there exists room for PE expansion.
1st Jul 2025 at 07:36 am
30th Jun 2025 at 03:57 pm
30th Jun 2025 at 08:46 am
29th Jun 2025 at 09:51 pm