Economics of CAT

The rat race for Common Admission Test (CAT) is nearly two-lakh strong and growing at over 20% annually. With the number of CAT applicants likely to touch 3.5 lakh in the next five years, the institutes offering preparatory courses are aggressively expanding their presence. The coaching class industry for CAT and other entrance exams for B-schools is estimated at over Rs 500 crore.

According to industry estimates, about 60% of CAT applicants in urban and semi-urban areas opt for coaching classes. The aspirants do not mind shelling out Rs 10,000-25,000 to take coaching for cracking CAT. Apart from six IIMs, more than 80 other B-schools consider CAT score for their admission process.

The market for players like Time, Professional Tutorials (PT), IMS, Career Forum and Career Launcher is not limited only to major cities. Smaller towns are also emerging rapidly on their radar.

Interestingly, Indore-based PT is considering launching a centre in the Middle East, targeting NRI and foreign students. “We are aiming to have 100 centres under our banner by the end of the current calendar year and signing up new franchisees aggressively.

We are anticipating the CAT aspirants to grow to 3.5 lakh in the next five years. Indian society is becoming upwardly mobile and CAT is emerging as one the favourite means to achieve career goals,” said Sandeep Manudhane, CMD, PT Education and Training Services that offers training for entrance exams through its 60 centres.

In Gujarat, PT is launching its new centres in relatively smaller centres like Godhra, Junagarh, Gandhidham, Gandhinagar and Mehsana. It trained close to 35,000 students last year and is aiming to enrol some 60,000 students during the current year for CAT, GUJCAT, TOEFL, GRE, GMAT and IELTS, among others.

Career Forum, headquartered at Pune with 55 centres, is also aiming to have 100 centres under its banner. “Number of coaching classes is mushrooming with consistently increasing CAT applicants. Also, students prefer to take coaching for CAT that is considered as the toughest entrance test in the country.

Meanwhile, TIME that runs a network of 130 centres across the country would set up 20 more in the near future. “We expect to train at least 60,000 students this year for CAT alone.

More students from smaller cities and working executives across cities are increasingly taking CAT,” Manek Daruvala, managing director, Time told ET. To capitalise on the increasing footfall, coaching centres are also offering services for overseas education and coaching for exams such as TOEFL, GRE, GMAT and IELTS