Wagons Learning Ltd. IPO: Key Details

Wagons Learning

• Wagons Learning is coming out with an initial public offering (IPO) of 46,80,000 equity shares in a price band Rs 78-82 per equity share.
• The issue will open on May 2, 2025 and will close on May 6, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 7.80 times of its face value on the lower side and 8.20 times on the higher side.
• Book running lead manager to the issue is Khandwala Securities.
• Compliance Officer for the issue is Neeru Saini.

Profile of the company

Wagons Learning is engaged in providing corporate training, digital learning and skill development solutions. The company functions on a B2B model wherein it provides Training and Certifications, Digital Learning solutions, skill development solutions, trainer outsourcing and payroll management solutions to its clients. It specializes in corporate training and consulting across a broad range of domains such as sales training, customer service training, soft skills and behavioural training, functional training and knowledge-based, skill based training solutions to the employees of corporate operating in the industries like Automotive, Banking and financial services, Pharma and healthcare services etc. Its corporate training programs provide holistic solutions and it is committed to a philosophy of excellence. Its team has a broad network to offer training and organizational development resources.

In addition to certifications and training offerings, it provides a comprehensive and advanced digital learning solutions. Its Digital library is compatible with all Learning Management Systems (LMS) and Learning Experience Platforms (LxP). Its full suite of software service offerings includes LMS, LxP, digital libraries to corporates, universities, schools and colleges. It is a National Skill Development Corporation (NSDC) certified company for conducting a range of skill development programs under the Skill Sathi program and its term sheet is valid till January 04, 2027.

The company caters to professional across various industries and domains and offer assistance to organizations in formulating their learning and development strategies. Its dedication lies in offering, its clients with the best possible service with trainers available on demand around the clock. It provides skill development and skill upgradation to graduates and post graduates to make them industry and job-ready. The company has skilled 550,000 professionals through Classroom, Virtual and digital modules and it has garnered the expertise on providing training solutions on various subject matter. 

Proceed is being used for:

• Meeting out the working capital requirements of the company
• Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company
• Offer related expense
• Meeting out the general corporate purposes

Industry Overview

The Corporate Training Market in India is in its growth stage and will continue to be so for the next 10-15 years. Considering the size and magnitude of growth factors such as a robust IT and service industry, large and young workforce and India’s fast GDP growth the corporate training market is very much underpenetrated in India. Its size is small when compared to the global corporate training market size therefore, indicating lots of untapped potential for growth. From FY13-FY19 market was growing quickly at healthy double digit CAGR however in FY21 the overall market growth contracted due to the Covid-19 pandemic. In the review period 2017-2022P, the Corporate Training Market in India grew at a positive CAGR of 9.8%. Even though there was a negative contraction in FY21, market was able to maintain a positive CAGR as IT and service companies quickly resumed operations by adopting hybrid and work from home model and training companies were able to deliver online through various modes of e-learning.

The Corporate Training Market in India is a very competitive and a fragmented space with the presence of 500-600 companies. However, a good chunk of the market share is captured by 7 companies namely NIIT, Manipal Global Education, CADD Centre, Aptech Limited, Centum Learning, Koenig Solutions and Hughes Global. Price, post training support, brand value, clientele, trainers’ qualification, customizations and value-added services like assessment, performance and ROI evaluation are the competitive parameters in the industry. In order to have an edge over the competition many companies offer other services as well like staffing, HR management, IT support, coaching, audit etc. Lately, many self-based learning platforms like Udemy, Coursera, Simplilearn, upGrad have also become popular offering courses and modules keep working professionals need in mind.

The Corporate Training Market in India is expected to grow with a healthy CAGR of 16.3% in FY’22P and FY’27F. The focus would be on to keep the learners and engaged by enhancing experiential learning therefore use of technologies like AR/VR, Metaverse and Micro learning concept would be prevalent in future. Courses on data and business analytics, AI-ML, cyber security, cloud infrastructure would be in high demand. IT and BFSI are going to be the larger support pillars for the corporate training market. 

Pros and strengths

In-house domain experts: The company has PAN India location reaches across tier 1, 2, 3, and 4 cities. It has in-house domain experts, experienced retainer ship trainers and empanelled trainers. Also, it has in-house Subject Matter Experts (SME) & Instructional Designers (ID) for content development. The company also has SMEs & content team follow the 3D Model. Further, the company has comprehensive in-house digital platform support to enhance and reinforce in-person Instructor-Led Trainings (ILT).

Flexibility and Scalability: Digital learning allows for flexible schedules, catering to diverse learner needs. The Company can reach a wide audience without significant infrastructure costs. Moreover, compared to traditional learning methods, digital learning often requires fewer resources. Further, the content is tailored to individual learner needs, enhancing engagement and comprehension.

Customization capabilities: The ability to tailor training programs to meet the specific needs of corporate clients are its strong selling point. Customization enhances the relevance and effectiveness of the training. Moreover, offering a variety of training methods such as in-person workshops, online courses, and blended learning options cater to different learning styles and preferences.

Risks and concerns  

Maximum revenue comes from BFSI sector: The company is mainly catering to Banking, Financial Service and Insurance (BFSI), Automotive, IT & ITES, Pharmaceutical & Healthcare sector clients. Out of these, the company is generating majority of the revenue from BFSI sector clients. The company has garnered 57.68%, 35.69%, 36.70% of the total revenue from BFSI sector in FY24, FY23 and FY22 respectively. Any slowdown or regulatory changes in the BFSI sector may impact the business operations and revenue of the company.

The company is subject to foreign exchange control regulations: The company may be involved in business transactions with international clients located globally in future and has to conduct the transactions in accordance with the rules and regulations prescribed under FEMA. Its international operations make it susceptible to the risk of currency fluctuations, which may directly affect its operating results. In case it is unable to adhere to the timelines prescribed under the applicable laws or are unable to mitigate the risk of currency fluctuation, it may adversely affect its business, results of operations, financial conditions and cash flows.

Present promoters of the company are first generation entrepreneurs: The company’s present Promoters are first generation entrepreneurs. Their experience in managing and being instrumental in the growth of the company. The concern is that their limited experience and knowledge could potentially hinder the company's growth in the future. The statement is being cautious and transparent about this uncertainty, as it cannot assure that the promoters' inexperience won’t affect the company’s success.

Outlook

Wagons Learning is engaged in providing corporate training, digital learning, and skill development solutions. The company operates on a B2B model, offering services such as training and certifications, digital learning (LMS/LXP), skill development, trainer outsourcing, and payroll management. It serves clients across India and has expanded internationally with a branch office in Dubai, UAE, offering education technology solutions, digital libraries, government project execution, and content development. The company is also entering the B2C space by launching industry-ready certification courses. On the concern side, the company’s major revenue is sourced from Banking, Financial Service and Insurance (BFSI) sector clients. Its inability or failure to manage and attract more clients could adversely affect its business. The present promoters of the company are first generation entrepreneurs; their limited experience may restrain the growth of the company. Moreover, the company is subject to foreign exchange control regulations which can pose a risk of currency fluctuations.

The company is coming out with a maiden IPO of 46,80,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 78-82 per equity share. The aggregate size of the offer is around Rs 36.50 crore to Rs 38.38 crore based on lower and upper price band respectively. On performance front, total Income has increased by Rs 1,734.15 lakh (107.27%) from Rs 1,616.57 lakh in the fiscal Year ended March 31, 2023 to Rs 3,350.72 lakh in the fiscal Year ended March 31, 2024. The increase was because of better macro conditions and preparedness of the company to serve new client with better and new training modules and further avail the benefits of the tail winds. Moreover, net profit after tax, extraordinary items and Minority interest has increased by Rs 490.29 lakh (691.31%) from Rs 70.92 Lakh in the fiscal Year ended March 31, 2023 to Rs 561.21 lakh in the fiscal Year ended March 31,2024 due to increase in the client base and lower spending on content creation.

With digital learning, the company can expand its reach beyond geographical boundaries, tapping into international markets. Collaborating with educational institutions, corporations, or other organizations can provide opportunities for growth and innovation. Collaborating with other companies or organizations to offer complementary services or reach new audiences can create synergies and generate new business opportunities. Moreover, integration of emerging technologies like AI, VR, and AR can enhance learning experiences and attract new customers.