Case Detail

Case Summary

Surya Tutoring: Evaluating a Growth Equity Deal in India

Case Number: 5-312-501, Year Published: 2012, Revision Date: November 16, 2015

HBS Number: KEL679

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Authors: Paola Sapienza; Vineet Bhagwat; Apaar Kasliwal

Key Concepts

Entrepreneurial Finance, Entrepreneurship, Growth Strategy, Private Equity, Venture Capital


The case focuses on two major challenges in deal making in emerging market economies—deal sourcing and negotiation—by focusing on a real (but disguised) Indian private equity deal. In 2010 Surya Tutoring was a fast-growing tutoring academy for high school students aspiring to gain admission to the prestigious Indian Institute of Technology (IIT). Surya’s CEO, R. K. Sharma, wanted to expand its reach beyond Kota (a city of 1 million people in the northern state of Rajasthan), which had become the center of the IIT prep school industry and home to tens of thousands of students studying for the rigorous IIT entrance exam. Sharma knew there was vast untapped potential in the teeming Indian metropolises of Mumbai, Chennai, Delhi, and Bangalore, as well as in foreign markets such as Dubai and Australia.

Sharma had received term sheets from two private equity firms willing to finance Surya’s expansion. By the end of the month he needed to decide which to accept: the offer from big bulge bracket fund Blackgem, or the one from ZenCap, a small Indian firm based in Mumbai with which he had become intimately familiar during the past year.

Learning Objectives

After analyzing and discussing the case, students should be able to:
• Identify the differences between the United States and an emerging market such as India in deal sourcing, negotiation, and financial contracting
• Value a growth equity transaction in an emerging economy, including financial, contractual, and qualitative (social networks, local knowledge, trust) aspects of the deal

Number of Pages: 25

Extended Case Information

Teaching Areas: Finance

Teaching Note Available: Yes

Geographic: Kota, Rajasthan, India

Industry: Education

Organization Name: Fictional

Organization Size: Small

Decision Maker Position: Founder, CEO

Decision Maker Gender: Male

Year of Case: 2012