One of the largest private schooling institutions in Pakistan, City Schools (Pvt) Ltd., is considering listing its shares on the country’s stock exchange, which will make it the first ever in its industry.
According to the CEO and founder of City Schools Farzana Firoz, they plan to raise around $40 million for the purposes of buying real estate and land for building campuses and expanding existing ones. A private placement is being considered and then a listing, with plans to be finalized in eight weeks.
A good 60 percent of our students aren’t in purpose built campuses, that’s why we’re here, what we want to do is consolidate our schools and that means real estate, buying land, making campuses. You owe it to the children to institutionalize the set-up.
The school system has 192 branches across Pakistan with more than 65,000 students enrolled. The average fee is around Rs 20,000 per month. This doesn’t come as a surprise as MSCI is considering moving Pakistan from frontier market status to emerging market status which is expected to bring more inflows in Pakistan’s capital markets. MSCI is due to announce its results on June 14th about whether Pakistan will see its market status change.
Farzana further added:
The payback is already built in with the student numbers being there, the bankers are also happy to see feasibility like that and it also gives us a certain comfort level as well.
The government’s total spending on the education sector remained at around 2 percent of the GDP which is the lowest among the South Asian countries according to Pakistan’s economic survey, with about half the children aged below 16 not going to school.
She thinks that despite their plans for expansion, private schooling is not the answer to the country’s literacy problem.
That’s the upper crust, that’s not the country, that’s not Pakistan. The ultimate and final responsibility for this is with the government.
The participation of the private sector is not a solution to the problem of education, the biggest provider of education across the world globally is the government and that role cannot be replaced by the private sector, it’s like giving cake to the country when they need bread.