The beginnings of the S Chand Group were steeped in nationalism. Started by Shyam Lal Gupta in 1937, its mission was to publish Indian authors unable to find a voice in colonial times. S Chand has evolved into one of the biggest domestic publishers and exporters of textbooks. It publishes all types of educational books: Higher education, technical and management education, school books (they account for 60 percent of its revenues).
The education market in India is roughly pegged at $20 billion, growing at over 30 percent. The industry’s attractiveness is obvious and, among all its segments, the publishing space has the lowest entry barrier. Reason: It is the least infrastructure-intensive.
But the educational publishing market, worth about $2 billion, while promising, is very fragmented. There are over 8,000 publishers but not more than 20 have a turnover of over Rs 100 crore. It is a high margin, high growth, direct-to-consumer business. Also, it is dominated by MNCs like Oxford University Press India, Pearson Education and McGraw-Hill. But in the domestic category, S Chand is the second largest player by revenue after Navneet Publications. It has grown from Rs 100 crore in 2005-06 to Rs 310 crore in 2012-13. Its target is to become the largest player in the Asian publishing market over the next five years.
THE PEOPLE BEHIND IT
S Chand is the first in the Indian publishing industry to be funded by a private equity firm. What stood out for Everstone Capital, which took a 31 percent stake in S Chand in 2012-13, was its entrepreneurial leadership. MBA drop-out Himanshu Gupta, a third generation entrepreneur, as joint managing director showcases the ambitious and aggressive side, while brother-in-law Dinesh Jhunjhunwala, vice chairman, is the more seasoned face. “They have the perfect combination of aggression and realism,” says Dhanpal Jhaveri, partner and CEO at Everstone Capital. “Both have shown commitment not just to growth, but to growth with profitability.” S Chand is the industry leader in operating margins.
The team has had experience in acquiring companies—in growth by aggregating. This is a crucial aspect of strategy for anyone who wants to grow in the Indian market. Thanks to Everstone’s funding, S Chand last year bought out Vikas Publishers along with its imprint Madhuban. It was the largest acquisition in the Indian publishing industry and cost between $25 and $30 million. “We understand that, organically, we can only grow at 20-25 percent. So we want to be in the business of acquisitions. And we are looking at both the publishing as well as the digital space,” says Gupta.