Earnings before interest, taxes, depreciation and amortisation (EBITDA) has grown even faster at 26% CAGR, driven by new assets and its services business, the company’s management said.
The education infrastructure provider, which opened its ₹2,100 crore initial public offering (IPO) for subscription, operates across student accommodation, schools and an asset-light managed beds business. CEO Narasimha Jayakumar said the company has significant operating leverage and is not just a real estate play.
“We started in 2017. Today, Elevate is the largest player in the country, having been the pioneer in terms of ownership and management of student accommodation,” Jayakumar said.
A key advantage for the business is the long duration of its contracts. Agreements with university partners typically run for 50-60 years, while school contracts can extend to 30 years, with around 15 years generally locked in. This provides long-term revenue visibility, while contractual escalations add a steady layer of growth.
Elevate is also expanding its asset-light managed beds business, where it manages student accommodation on behalf of universities rather than owning the properties. The business is growing at around 25% CAGR and is similar to the asset-light model used in hospitality.
India’s student accommodation market remains significantly underserved, according to management. With more than 1,000 private universities potentially fitting Elevate’s target market, the company sees room to expand through new assets and acquisitions.
The IPO is also aimed at strengthening the balance sheet and expanding the asset base. Of the ₹2,100 crore fresh issue, ₹1,100 crore will be used to acquire K-12 school assets from the promoter group. Management said the assets have been independently valued at fair market value and that no further promoter assets will remain for a similar transaction.
Another ₹750 crore will go towards debt repayment. CFO Vinod Rao said this would reduce net debt from around ₹3,400 crore to about ₹2,650 crore and lower annual interest costs by roughly ₹60 crore.
“We believe that it’s a fair number of amount of debt to have on our balance sheet,” Rao said, adding that the company has no immediate plans to reduce debt further. Elevate’s gross block is around ₹7,000 crore, while its current net debt-to-EBITDA stands at 4.5 times.
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With long-term contracts, recurring escalations, new asset additions and a growing asset-light business, Elevate expects its IPO to provide capital for further expansion in India’s education infrastructure market.
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