India Ratings says that the credit quality of its rated education institutes will see no major credit impairments from liquidity constraints due to flexibility of lenders.
Enrolment growth slowdown and fee reimbursement delays tightened the liquidity of issuers in FY12. Nevertheless, lenders adjustments in accepting loan obligations payments after due date, protraction of loan tenors and moratorium averted defaults and rating downgrades. The leeway available is governed by the issuers relationship with lenders and not by its size.
In FY12 the sectors market size is estimated to have been USD71.19bn, up from USD62.45bn in FY11 and India Ratings projects it to increase to USD109.84bn by FY15, says Siva Subramanian, Associate Director, Public Finance, India Ratings.
Shortage of quality workforce is one of the major bottlenecks for sustained high economic growth in the country. India Ratings expects demand for quality workforce to remain high in the medium term and consequently, the demand for quality education, especially higher education, will follow.
Not-for-profit rider clause and restrictions on foreign investments have led to formation of new structures. India Ratings views the structure evolvement as positive for the sector.
The agency expects continuous high demand for the education sector considering the federal governments Twelfth Five Year Plan to propel the gross enrolment rate across levels, establish new entities, liberalise the sector (allow private universities and foreign players) and take other measures including access enhancement. These measures, combined with adherence to contractual provisions, could result in a positive outlook.
The report 2013 Outlook: Indian Education Sector
India Infoline News Service / 08:59, Sep 15, 2014
Many a times parents overlook other goals as they are too busy focusing on just one goal, that is on their child's education. They are too emotionally involved in achieving this particular goal that they forget planning for their retirement and saving for other emergencies.