The S Chand Group, which provided an alternative to overseas publishing houses once holding monopoly on printed educational matter in India, has successfully penetrated the urban and semi-urban areas and is making concerted efforts to reach the rural and semi-rural ones. Som Nath Sapru describes how, while tracing the group’s history
It was early 1937 when two young men, fired by the ideal of nationalism, thought about doing something constructive to propagate the feeling through magazines and books. They were Shyam Lal Gupta, the founder of the S Chand Group, and Vishwa Nath, founder of the Delhi Press Group.
Since those early days, the S Chand Group has emerged as India’s largest provider of text books, work books, self-help books, etc. It publishes course material prescribed by the CBSE (Central Board of Secondary Education) and various colleges, including books for engineering and medical education. The group always encouraged Indians to write on various subjects taught at all levels of school, colleges and universities. It provided an alternative to overseas publishing houses which had a monopoly at one point.
The group has its own printing plants in three states – the mother plant is in Central Delhi and the other two are in Sahibabad, Uttar Pradesh and Rudrapur, Uttarakhand. All three have all the facilities for print production, finishing and despatch under one roof. The group continuously upgrades and updates the plants in pre-press, in-press and post-press areas. The group has the reputation of producing their books on technologically advanced machines such as Goss (two units), Rapida and even domestically custom-built and manufactured Pressline 4-tower machinery.
The stakeholders in the S Chand Group see a very bright future for the publishing sector because of the continuous growth of literacy in urban and rural areas of the country. Himanshu Gupta, joint managing director, said in a recent interview that “…the number of schools is increasing in all regions of the country – today even a poor person is looking forward to educate his children in an English medium school”.
The education market in India is pegged roughly at US $ 20 billion – with a growth of 30 per cent. The industry’s attractiveness is obvious and among all its segments, the publishing space has the lowest entry barrier, the reason being that it is the least infrastructure-intensive. As aspiration levels rise, more private schools are experiencing a continuous growth path. This contributes to the growing demand for more text books and self-help books.
India has more than 10000 publishers, of which more than 20 have a turnover of Rs 100 crore. The S Chand Group had a revenue of close to US $ 100 million in FY-16 and are looking to scale-up while exploring markets which are completely unorganised as of now. It has charted an aggressive acquisitions agenda and over the next five years, plans to acquire 100 per cent or majority stakes in three to five regional publishing houses that offer products for state education boards.
Over the past two-and-a-half decades – when the competition was at its peak – students needed more than NCERT (National Council of Educational Research and Training) books to get admission into professional colleges. They needed supplementary books and reference books. And this helped the publishing business.
The S Chand Group divided the country into four sectors – urban, semi-urban, rural and semi-rural. It has successfully penetrated the urban and semi-urban areas and is making concerted efforts to reach the rural and semi-rural ones. The group’s strength is distribution and outreach programmes through its 60 plus offices in all the states and over 700 field staff who have been set the target of reaching at least 25000 institutions per year which translates to 25 million students. This number is expected to quadruple by 2021.
The S Chand Group is the first Indian publishing house to be funded by an international private-equity firm, Everstone Capital (the private sector investment arm of the World Bank). Everstone Capital took a 31 per cent stake in S Chand in 2012-13. Another round of funding worth US $ 27 million came from the International Finance Corporation recently.
This writer understands that 90 per cent of the group’s revenue is from its three printing plants, while digital services to students of professional courses such as medicine or engineering accounts for five per cent. The goal is to raise this to 25 per cent within the next financial year. Himanshu Gupta and his brother-in-law Dinesh Jhunjhunwala are the masterminds behind the group’s success. This duo represents the third generation of entrepreneurs.
In a recent acquisition, the group picked up majority shares in the Kolkata-based Chaaya Prakashini, a leading text book publisher in eastern India catering to students from Std 1 to Std XII, besides bringing out college and engineering level books too. An Economic Times report puts the total value of the acquisition at Rs 220 crore. Insiders say that the acquisition was preceded by two others – Vikas Publishing House in 2012 and New Sarswati House in 2014, both Delhi-based publishers.
(The writer has a master’s degree in Print Technology and Management. He is a former editor of the IPAMA Bulletin.)