Feature

Byte into this

Why Aptech is a good bet (Hint: there's more to the company than its recent buyback)

Soumik Kar

If the 1980s and 1990s were all about queues of students eager to sign up for multi-year courses, the millennium has been about potential owners lining up at Aptech. Founded in 1986 by Atul Nishar, the computer training institute that along with NIIT defined the space has changed hands several times in the past decade. In 2003, Nishar sold out to Chennai-based IT training company SSI, the brainchild of serial investor Kalpathi S Suresh. Two years later, billionaire investor Rakesh Jhunjhunwala and his family, along with Ramesh Damani and Asit Koticha, picked up a 32.19% stake in Aptech at ₹56 per share. And in 2010, Jhunjhunwala picked up a further 2.24% for about ₹8 crore. 

Making magic

Aptech’s animation arm, Arena, contributes a major chunk to revenues

Aptech would have had a fourth owner in 2012 had Jhunjhunwala’s plans to sell his stake come through. The ace investor had even hired Avendus Capital to scout for prospective suitors and a couple of private equity investors and companies, such as Core Education & Technologies and Team Lease, did express interest, but walked away without making a bid due to a valuation mismatch. At the time, Aptech’s promoters were said to be looking for a valuation of over ₹ 600-700 crore, while the market didn’t think the company was worth more than ₹ 460 crore. Still, the company has a good chance of changing hands again, given its promoter now is a financial investor, not an IT industry hand. But while it remains a zero-debt company with the core business continuing to bring in cash, there are a few concerns regarding some investments the company has made that analysts believe Aptech needs to address for a possible re-rating.

Beyond bits and bytes

Over the years, Aptech has evolved into much more than a computer training institute that taught teens just out of school how to code, although it still remains the No.2 player in that space, after NIIT. In 1996, it branched off to offer animation and multimedia courses under the Arena brandnam

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