Reliance Industries' Arm Buys 38.5% In Online Tutoring Firm Extramarks
India's largest private sector company Reliance Industries has put another foot forward to move into a new-generation business in the country by acquiring 38.5 per cent stake in Extramarks Education Pvt Ltd, a company focused on school education and digital learning. However, the deal value has not been disclosed.
Although a small step by the energy giant, the strategic buy gives it further leverage in the digital media & communications field after announcing a big bang entry into the wireless communications space with acquisition of majority stake in Infotel Broadband Services Ltd.
Last year, Reliance Industries acquired 95 per cent in Infotel through a fresh infusion of capital worth around $1 billion. Infotel was a privately held firm, owned by the promoters of HFCL. The move came soon after group chief Mukesh Ambani struck off a non-compete agreement with younger brother Anil Ambani who has existing presence in the telecommunications and content business.
The latest deal has been routed through Infotel, which invested through an affiliate company Reliance Strategic Investments Ltd.
"The investment by Infotel will enable Extramarks to pursue its aggressive growth plans in further developing services and widening market penetration. Extramarks' digital distribution model will provide invaluable services to the student community across age-groups, including education support and study help at affordable prices," the company stated.
It is not clear if Infotel acquired the entire stake through subscription to fresh shares or partly through share purchase from existing shareholders of Extramarks.
Noida-headquartered Extramarks is promoted by the BPO firm Cleave Global e-Services Ltd. The group is led by promoter Atul Kulshrestha who is the chairman of Extramarks. The firm was looking to raise $5 million in VC funding four years ago although not much was heard about it as global markets went into a tailspin, bringing down PE/VC transactions in 2008-09.