IPO Size: Rs. 450 cr 

• Rs. 170 cr Fresh Issue for (i) Rs. 45 cr debt repayment to become net debt free (ii) marketing and brand building activities for Rs. 81 cr
• Rs. 280 cr Offer for sale (OFS) by the promoter (78% to decline to 57%)

Price band: Rs. 846-890 per share

M cap: Rs. 1,972 cr, implying 23% dilution

IPO Date: Tue 23^rd Sep to Thu 25^th Sep 2025, Listing Tue 30^th Sep 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Mumbai based Online Education Company

Jaro Institute is a 16 year old platform, providing online course, in collaboration with 36 partner institutes, for:

1. Higher Education Degrees (bachelor’s and master’s) such as online MBA, human resource management, supply chain
2. Upskilling Certification Courses in cyber security and cloud computing, analytics and data science, general management and leadership, healthcare management etc.

Relation with Partner Institutes

80% of Rs. 250 cr revenue is earned from Tier2 institutions, with top3 (Symbiosis, Dr. DY Patil, Bharti Vidyapeeth – all in Maharashtra) accounting for half the revenue. If company is a platform business, it must not be restricted to few institutes or regions.

Collaboration with tier 1 institutes like IIM-A, IIM-M, IIM-Indore, IIT-M given very low revenue contribution. Relationship with partner institutes spans barley 4-5 years old, which is a monitorable in medium term.

Asset Light Business Model

Of 31,434 admissions in FY25, 68% was from performance marketing, and balance 32% from referrals. On an average, company earns Rs. 80k revenue per admission and spends Rs. 24k customer acquisition cost (CAC). In past 3 fiscals, revenue rose ~3x from Rs. 85 cr in FY22 to Rs. 252 cr in FY25, due to growth in both volume (number of admissions) and value (fees per admission).

FY25 revenue grew 27% YoY to Rs. 252 cr, while EBITDA rose 27% YoY to Rs. 84 cr, leading to 33% EBITDA margin. PAT jumped 36% YoY to Rs. 52 cr, leading to 21% net margin, EPS of Rs. 25 and 30% RoE, on Rs. 171 cr net worth.

Attractive Valuation

IPO funds will be used for marketing and debt repayment, providing healthy growth visibility. Based on FY26E EPS of Rs. 35, m cap of Rs. 1,972 cr implies a PE multiple of 25x, which is seen attractive.

Jaro is definitely better than education-provider Veranda, which is loss making. Crizac, another higher education company, though not in similar line, is ruling at a PE of 30x. Jaro’s 33% EBITDA margin is higher than some platform business of CarTrade (24% EBITDA) and Blackbuck (22%), while both rule much higher at 60x and 29x PE.

Although promoter stake will reduce substantially to 57% post listing, in March 2024, promoter did secondary sale at Rs. 750 per share. So 19% premium in 19 months is justified, given FY25 financial growth. Anyways, education is one sector booming in both recession and upturns.