Navigating the Global Classroom: Crizac's ₹860 Crore IPO Bid Amidst Key Challenges

In a significant move within the global education sector, Crizac, a prominent B2B platform facilitating student enrollment for international educational institutions and agents, is gearing up to raise ₹860 crore through an initial public offering (IPO). This capital infusion, primarily an offer for sale, will see the promoter group's stake decrease from 100% to 80% post-listing.

Crizac operates on an intriguing financial model, characterized by negative working capital. This advantageous position stems from the company receiving payments from institutions upfront before disbursing funds to its network of agents.

However, potential investors will note several key factors. The business demonstrates a clear seasonal trend, with the latter half of the fiscal year typically generating higher revenues. Furthermore, a significant 95% of Crizac's revenue is currently sourced from the UK, highlighting a substantial geographic concentration that could pose risks.

A notable omission from the Red Herring Prospectus (RHP) is the precise number of students enrolled through Crizac's platform. This lack of granular data makes it challenging for analysts to accurately forecast future growth trajectories. Given these variables, a prudent approach for investors might be to observe the company's performance post-listing before making definitive investment decisions.

Despite these considerations, Crizac's operational scale is impressive. Between fiscal years 2023 and 2025, the company successfully processed over 710,000 student applications and collaborated with more than 173 global institutions. As of FY25, Crizac boasted a robust network of 3,948 active agents, with 2,237 based in India and the remaining 1,711 spread across 39 other countries.

Financially, Crizac has exhibited strong top-line growth, with revenue from operations surging by 76% annually to ₹850 crore in FY25 from FY23. While there has been some volatility in EBITDA due to the termination of certain contracts in the previous year, it still managed to rise by 42.5% annually to ₹212.8 crore during the same period. However, the EBITDA margin experienced a dip, falling to 25.1% in FY25 from 38.2% in FY23.

The company's net profit has shown consistent growth, climbing from ₹110.1 crore in FY23 to ₹152.9 crore in FY25. Crizac's negative working capital days stand at a healthy 1.8. It's worth noting the substantial increase in total current liabilities, which escalated from a mere ₹1.2 crore in FY23 to ₹367.7 crore in FY25, primarily due to outstanding dues payable to creditors. Concurrently, trade receivables witnessed a 53% year-on-year jump, reaching ₹256.4 crore.

Crizac is seeking a price-to-earnings (P/E) multiple of up to 28 for its IPO. Intriguingly, the company does not have any direct listed peers in India. When compared to Australia-headquartered IDP Education, a company with a similar business model and nearly seven times Crizac's revenue, IDP currently trades at a significantly lower P/E of 7.6. This valuation disparity will undoubtedly be a key point of consideration for prospective investors.