Asia’s premier higher education multinational goes global

A slew of big-ticket domestic and overseas projects launched under the banner of its for-profit subsidiary Manipal Global Education Services, are set to dramatically transform the Manipal Education & Medical Group from a competent provider of professional education in peninsular India into Asia’s premier higher ed multinational. Dilip Thakore reports

The Manipal (Karnataka) and Bangalore headquarters of the Manipal Education and Medical Group (MEMG) — one of the oldest and most respected names in private professional (medicine, engineering, business and hospitality management, nursing and distance learning) education in India — are buzzing with purposive energy. A slew of big-ticket domestic and overseas projects launched under the banner of its for-profit subsidiary Manipal Global Education Services Pvt. Ltd (MaGE, formerly Manipal Universal), which are scheduled to take wing this year, are set to dramatically transform MEMG from a competent provider of professional education in peninsular India into Asia’s premier higher education multinational.

In March, the mint new state-of-the-art, multi-disciplinary Manipal International University, Malaysia — under construction with a projected outlay of US$ 200 million (Rs.1,100 crore) and capacity to accommodate 20,000 students on its 140-acre campus in Nilai, south of Kuala Lumpur — will admit its first batch of 400-500 freshers. Meanwhile back home the equally state-of-the-art Manipal University, Jaipur, legislated by a special Act of the Rajasthan state assembly and under construction on 67 acres on the outskirts of the pink city with a projected capex of Rs.750 crore,  admitted its first batch of 960 students in August last year.

And on November 26 IDFC Private Equity Fund announced an investment of Rs.100 crore in Manipal Servicecorp Facility Management Pvt. Ltd (MSFM), an MEMG subsidiary promoted to provide premises and facilities management services to corporates, which has recently been repositioned as a student-residences and facilities management company. Top of MSFM’s agenda is construction of 5,000 rooms for Manipal University, Jaipur, 500 rooms for Manipal’s Banking Academy in Bangalore and 600 for the T.A. Pai Manipal Institute B-school in Manipal at an aggregate capital cost of Rs.450 crore. After that the company will roll out its services across India and abroad.

These ambitious, capital-intensive and unprecedented initiatives are just a few of the projects on the crowded drawing board of MEMG. With the group’s not-for-profit Manipal University and Sikkim Manipal University (under Indian law, education institutions are obliged to operate as charitable societies or trusts) well established and charting their own course under the supervision of independent boards of directors (see box),  Dr. Ranjan Pai, the 40-something third generation scion of the Pai family of Manipal which founded the Manipal Academy of Higher Education (MAHE) in 1942, has focused his attention on growing Manipal Global Education/MaGE into India’s first heavyweight for-profit education multinational.

“With the promotion of Manipal Universal in 2001, now renamed Manipal Global Education Services (MaGE), we have divided the Manipal Group into our not-for-profit domestic institutions, i.e. Manipal University, Sikkim Manipal University and Manipal University, Jaipur, and MaGE which raises capital to establish and manage higher education institutions abroad. With MEMG’s domestic universities well established and managed by their boards of directors, my new objective is to develop and scale up the operations of MaGE. Even as Manipal International University, Malaysia is under construction near Kuala Lumpur, we have drawn up plans to establish greenfield universities in Kenya and Sri Lanka. Concurrently our existing higher education institutions abroad — the Melaka Manipal Medical College, Malaysia, MAHE-Manipal Dubai campus and the American University of Antigua are being upgraded. Another major initiative of MEMG is Manipal Servicecorp Facility Management, a company which is in the business of constructing and managing full service students’ residences for our own and other universities,” says Ranjan Pai who attributes “slow and cumbersome procedures and processes for clearance of greenfield projects in higher education” within India as a stimulus for MEMG’s overseas growth and development drive (see interview).

Quite obviously Pai is well aware that establishing MaGE as a force to be reckoned with in foreign countries where institutions of education are unprotected against foreign and domestic competition, is an altogether different proposition from success within India where due to strict regulation of private initiatives in higher education, demand for professional education far exceeds supply. However MEMG and MaGE have the historical advantage that over the past 70 years since the Manipal Academy of Higher Education was promoted against all odds by the legendary Dr. T.M.A. Pai (1898-1979), its successor Manipal University has painstakingly built itself an excellent reputation for delivering high quality professional education — especially medical education — at affordable prices in India and abroad.

For instance it’s not widely known that 25 percent of all medical practitioners in the middle income nation of Malaysia (pop. 29.5 million) are graduates of Manipal University. Moreover MaGE has inherited fully functional institutions of higher education in Nepal, Dubai, Singapore and Antigua (West Indies). Therefore it’s hardly surprising that MEMG has been receiving invitations from several developing countries anxious to establish high quality, affordable professional education institutions for their youth. MaGE has been promoted and established to respond to these demands and develop MEMG into a higher education multinational.

With MEMG’s painstakingly built reputation and capital estimated at Rs.1,500 crore invested in its overseas institutions at stake, Pai has assembled a formidable team of experienced professionals with proven track records in outward-looking Indian corporates to engineer mergers and acquisitions, construct greenfield campuses and upgrade MaGE’s inherited offshore institutions in welcoming countries around the world.

Last year (2011) T.V Mohandas Pai (no relation), the high-profile former finance and HRD director of Infosys Technologies Ltd (revenue: Rs.39,000 crore; headcount: 153,760 in 2011-12) until recently the bellwether company and darling of the Indian stockmarket, was inducted into MaGE as the (non-executive) chairman of its seven member governing board, following his dramatic resignation from Infosys where he was in the top management team for 17 of its most productive years (1994-2011).

“My job as chairman of MaGE is to safeguard the investment of our shareholders in India and abroad. This involves governance and superintendence of the management to ensure that it delivers fair returns to shareholders. Promoting institutions of higher education abroad where infrastructure and facilities standards are high and tuition fees are market determined, is a capital-intensive and long gestation business which requires substantial investment. MaGE has inherited world class higher education institutions in Malaysia, Nepal, Dubai and Antigua which require capital expenditure to remain competitive. Moreover we have drawn up plans to invest heavily in Africa and back home in India where the group intends to establish new universities/ campuses in Bangalore, Bhubaneswar, Noida and Gujarat. This will require resource mobilisation and management skills of high order,” says Mohandas Pai.

Likewise, S. Vaitheeswaran who was inducted into Manipal Universal (since rechristened Manipal Global Education Pvt. Ltd aka MaGE) in September 2011 as chief operating officer and appointed managing director and chief executive of the company (following the resignation of Anand Sudarshan last summer), has no illusions about the magnitude of the challenge involved in impacting MaGE in the booming but highly competitive global market for higher education dominated by hugely endowed American universities such as Stanford and Harvard, Nottingham (UK), Monash (Australia) among others. Yet he believes that as a MEMG company, MaGE has the advantage of the experience of the parent company which has developed Manipal University and Sikkim Manipal University (SMU) into model institutions providing globally-respected professional and hi-tech distance education at affordable third world prices which American, British and OECD universities can’t match.

“With two campuses in Malaysia, and one each in Dubai, Nepal and Antigua, we have acquired considerable experience in the business of managing and developing higher education institutions outside India. Simultaneously in SMU we have acquired valuable knowledge and experience of using new information communication technologies not only to deliver high quality distance education, but also manage and administer academic institutions. Indeed within MaGE which derives 45 percent of its annual revenue from Indian operations, we have developed the expertise to connect with students through their post-higher secondary life cycle from undergraduate to Ph D education spanning student acquisition, curriculum delivery, self-assessment through our company MeritTrac, and campus and/or asynchronous vocational and corporate education after graduation,” says Vaitheeswaran, an alumnus of the Regional Engineering College, Tiruchirapally and Indian Institute of Materials Management, Delhi, who has brought a wealth of valuable corporate experience with Lucas-TVS, Volvo-Eicher Commerical Vehicles (1985-2005), and as vice president of Infosys Technologies (2006-11) into his challenging new assignment.

The value of the higher education business that MaGE has inherited as a constituent institution of the parent MEMG is elaborated by V. Sivaramakrishnan, an engineering graduate of Bangalore University with an MBA from IIFT, Delhi and currently executive president of MaGE who has also brought rich corporate experience with HCL, Proctor and Gamble, Ford Motor Co and Sify into MaGE with whom he signed up in 2008.

According to Siva, the academic excellence of Manipal University is testified by the 106,000 admission applications it received for 5,800 seats last year. And the extent to which MaGE has mastered new information technologies is testified by the reach of the Directorate of Distance Education of Sikkim Manipal University, whose online learning programmes are delivered through EduNxt, a virtual learning platform developed by the company. A Gangtok-based PPP (public-private partnership) professional education varsity, SMU (estb. 1995) offers 37 study programmes in the hybrid model through MaGE’s EduNxt platform and 800 study centres to 220,000 students who learn, and interface with faculty online and in study centres if necessary, and write their exams online in any one of the 300 proctored (invigilated) centres of MaGE subsidiary MeritTrac.

“As testified by surveys conducted by Competition Success Review and Careers 360, SMU delivers the most efficient and user-friendly distance education programmes in India. The extent to which we have mastered the technology of online education is indicated by the fact that last year we received 1.1 million admission enquiries. From among the 128,000 students admitted into SMU’s distance education programmes last year, 34 percent searched for programme details online, received their content online, and were provided facilitation by SMU’s 800 learning centres countrywide at a very affordable tuition fee of Rs.13,000 per semester. Moreover, they wrote their exams in one of MeritTrac’s 300 online proctored testing centres and were awarded UGC recognised degrees by SMU. For your information 3 million exam papers were written online in MeritTrac centres last year, which makes it the largest proctored online testing and assessment company in India and perhaps worldwide. The success of SMU’s distance education programmes indicates that MaGE is now well qualified to deliver bricks-n-mortar and new technology education services worldwide,” says Sivaramakrishnan.

As MEMG prepares to transform MaGE into a force to be reckoned with in foreign climes and locations, it is pertinent to note that several for-profit projects have been launched by MaGE within India as well. Among them: the Bangalore-based ICICI-Manipal Banking Academy (estb. 2007) which according to MaGE spokespersons is the largest bank personnel training academy in India, second only to the State Bank of India’s in-house training programme. Promoted to provide an intensive nine-month residential training programme at its Bangalore campus followed by three months of supervised on-the-job internship to graduate probationary officers (POs) of ICICI Bank — India’s largest private sector bank — the academy has proved a runaway success, and thus far has trained and certified over 6,500 probationary officers of the private sector ICICI, Kotak Mahindra, Axis and Ratnakar banks as also the public sector Bank of Baroda, Punjab National and Andhra banks.

Under the academy’s unique students loan scheme, POs take loans from  employer banks to pay for their education and the loan amount is deducted from their salaries by way of EMIs (equated monthly installments) with provisions for writing off loans after specified years of service. Other high-potential strategic promotions and acquisitions grouped under MaGE include U21 Global (online business management education), MeritTrac and Manipal Servicecorp and Facilities Management (MSFM), all of whom provide billed services to Manipal universities and institutions in India, Malaysia, Nepal, Dubai and Antigua as also to non-captive customers and institutions.

“The overwhelming majority of India’s universities, colleges and institutions of higher education lack the knowledge and expertise to provide conducive residential and supportive maintenance, library, landscaping, housekeeping, laundry, catering, etc services. Drawing upon the experience of our parent Manipal University which provides India’s best students residences and supportive housekeeping, gardening and catering facilities and services, MSFM offers academic institutions the whole gamut of services from building world class hostels to maintaining and servicing them. Currently we are constructing 5,000 rooms for Manipal University, Jaipur, 500 for TAPMI and 600 for the Manipal Banking Academy in Bangalore. The experience derived from developing modern, cost-effective infrastructure facilities in India which are live testimony of our capabilities, will enable us to roll out MSFM services worldwide,” says Chandraketu Jha, a former chartered accountant with professional experience in Nigeria, the US and in Infosys Technologies for whom he developed campuses in four locations within and outside India.

But although the top brass of MEMG and investors including IDFC Private Equity, Capital Group, Catamaran Investments and Premji Invest, are confident about the success of the company’s overseas foray, inevitably there are skeptics who doubt its capability to establish a significant presence in the rapidly expanding and highly competitive international market for professional education. “The plain truth is that the Manipal Group has no presence in metropolitan India or any major city countrywide. Its flagship Manipal University is a small-town provincial varsity which hasn’t — and cannot — attract the country’s best academics concentrated in Delhi and the metros. Although Manipal University is of more than 60 years vintage, it’s difficult to recall any stellar academics with nationwide reputation or break-through research it has produced. Likewise Manipal universities and institutions abroad won’t be able to attract or develop top quality faculty or compete with globally renowned universities such as Stanford, MIT and Harvard which have begun broadcasting modestly priced and/or free-of-charge degree programmes online,” says a distinguished Delhi University professor who “wishes MaGE well” but  requested anonymity.

While there is some substance in the learned professor’s observation, the point he has missed is that the Manipal colleges and universities abroad aren’t positioned to go head-to-head with the world’s top-ranked universities such as Harvard, Stanford and Nottingham which are simultaneously going international. The USP (unique sales proposition) of MaGE is that the extant Manipal institutions in India and abroad already provide high quality, undergrad, especially professional education at affordable prices. While it’s undeniable that the vintage universities of America, Britain and OECD countries provide excellent education, their tuition fees are way beyond the reach of all except the most affluent elites of developing countries of the third world.

On the other hand Manipal universities in Malaysia, Nepal, Dubai and Antigua are affordable for middle class households in host and neighbouring countries. Decades of experience of controlling costs in India where government regulations force private universities to keep tuition fees low, has equipped MEMG and MaGE professionals to provide high quality English medium professional education at prices that Western universities can’t match. Moreover Indian academics have familiarity with English — the international language of business and transnational communication — which is far superior to academics in carefully selected host nations.

Nevertheless top managements of the apex-level holding company as well as of MaGE are well aware of the need to upgrade the quality of human resources across the board in this essentially services company. Consequently, high importance and great power and latitude is given to the 106-professionals-strong human resources division of MEMG/MaGE which has been given the brief to upgrade, train and develop employees in all constituent companies and institutions in education, healthcare, research, services and management.

This critically important task of developing (and projecting) excellent faculty and raising the performance standards of academics, managers, and service — including healthcare (MEMG owns/manages 14 corporate hospitals with 4,500 employees countrywide) — providers in a nation notorious for poor work ethic and slackers, has been entrusted to Nitish Mohanty, global head and chief human resources officer of MEMG/MaGE. An alum of Madras University and XLRI, Jamshedpur, Mohanty is well qualified to discharge this responsibility given the wealth of HRD experience he has acquired in HMT (1983-90), Ceat/Goodyear Tyres (1990-94), Max India Pharma (1995-98), Britannia Industries (1998-2002) and Bayer India (2002-04) prior to “following my heart” and signing up with MEMG in 2004, with a brief to upgrade the skills and talent of 19,958 professionals on the company’s numerous muster rolls.

“Within MEMG and MaGE there is acute awareness that if Manipal institutions are to make a significant impact abroad, we have to train and develop our professors and faculty, and institutional managers, to global standards. The role of this division as I see it, is to upskill our academics and promote the spirit of entrepreneurship within our managers. To attain these objectives we have designed robust performance appraisal systems. For instance, for our academics we have devised a Business Impact project under which we are testing a three tiered performance recognition and rewards structure. In essence this project which is being implemented in Manipal University, divides faculty into A, A+ and A++ categories with those in category A incentivised to move upwards — through student assessment, learning outcomes, cited papers and research output — to earn higher salaries, promotions and performance benefits. Similarly under a Developing Global Leaders programme for managers we nurture managers/ administrators within MEMG, induct management trainees and make lateral recruitments to prepare middle management for top-level positions through intensive training and assessment programmes. HRD is a serious function in MEMG/MaGE on which we spend Rs.14-15 crore annually,” says Mohanty.

Having assembled an excellent team of top-level managers with deep and wide industry experience and with institutional management and development knowledge drawn from  Manipal and Sikkim Manipal universities, now acknowledged as India’s most respected providers of medical and engineering and new technologies distance education at price points which few foreign institutions of higher learning can match, both Ranjan Pai, managing director of the parent MEMG (see interview p.50) and S. Vaitheesswaran, chief executive of MaGE, exude confidence that MaGE will succeed in impacting itself as a respected provider of high quality affordable professional education worldwide. “I believe that MaGE is now fully prepared to replicate the Manipal University experience of providing excellent medical, engineering, business and professional education using new technologies as the differentiator at affordable prices globally,” says Vaitheeswaran.

MaGE’s carefully strategised expansion into foreign markets is self-evidently a win-win proposition for MEMG, as it will not only create valuable high-yield assets overseas, but will also positively impact Manipal University, SMU and other domestic institutions as best practices and knowhow are developed abroad and imported into India. Yet implicit in MEMG/MaGE’s determined institutions promotion and development drive overseas, is criticism of the higher education regulatory regime in New Delhi and state capitals which has prompted these high performance companies to venture abroad despite massive unfulfilled demand for qualitative higher education in India.

A socially beneficial new year wish would be for wisdom to dawn upon the Central government and particularly Dr. Pallam Raju, the newly inducted Union HRD minister, to liberalise the regulatory regime and be as welcoming to private initiatives in higher education in India as are his counterparts in developing countries abroad.