Despite the border restriction putting a dent on international students coming to Australia for their education, IEL shares have performed extremely well. The $6 billion company, IDP Education is the largest stock on the ASX that offers exposure to the education sector Down Under. IEL shares have returned 83% in the past year and 48% in 2021. IEL shares have not just outperformed the ASX 200 index, but also outperformed several blue-chip companies that have not been affected by the pandemic.
This morning, IEL share price skyrocketed by 20.47% by market close. The reason – IDP Education announced an acquisition deal that will further strengthen their monopoly in the education sector. China and India have been the largest markets for our education sector. With Chinese-Australian tensions on the rise, it doesn’t take a wizard to come to the conclusion that India will play a much larger role for the education sector.
IELTS is an English test that potential students would need to take up and achieve a satisfactory grade, and this test is required to not just move to Australia for education, but the USA and Europe as well. It is a globally recognised test and British Council were the operators of IELTS in India which has a population of a billion and research suggests that over 700,000 students go abroad every year.
IDP Education has entered into a binding agreement to acquire 100% of the British Council’s Indian IELTS operations for £130 million on a debt free, cash free basis. IDP and the British Council currently both administer IELTS tests in India operating parallel pan-Indian distribution networks.
The Transaction will bring BC IELTS India operations under IDP ownership, establishing a single network that provides the foundation for IELTS to build on its leadership position in India. Post transaction, IDP will be the sole distributor of IELTS in the Indian market. India is the largest IELTS market globally by volume and has exhibited one of the highest country growth rates in recent years with historic annual volume growth of approximately 21% between CY10 and CY19 (prior to the impact of COVID-19).
IELTS, and the high stakes English language testing industry in India more broadly, benefits from several supportive structural growth drivers including strong population growth, a relatively young demographic, a high propensity to study abroad and high levels of demand for migration to English speaking countries.
IEL has always been one of the best education stocks for investors Down Under. This acquisition strengthens their monopolistic position as it gives IDP complete control of the fastest growing region in the world. IEL shares closed $29.38 a share today – an all-time high IEL share price!
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