Mohit Bhargava is among those being accused of dhoka, or betrayal. One of Kota’s most coveted physics teachers, Bhargava taught for 14 years at Allen Career Institute, the city’s largest coaching centre —till he decided to quit in June and join Unacademy, the edtech firm which has made a big-splash entry into offline coaching in Kota and is backed by global venture capital firms Sequoia, Tiger Global, Softbank, among others.
The new Unacademy centre where Bhargava meets us is a spiffy one. The cubicles are brightly lit, and the ambience more laidback than at Allen, where teachers, students and staff all wear the same uniform, where girls and boys are supposed to take different staircases, and stern posters warn students against the temptations of movies and mobiles.
Bhargava is wearing a black Unacademy T-shirt with jeans. The Apple watch on the 41-year-old’s wrist constantly buzzes as we speak. “Unacademy approached me in April and asked me to become part of their core team and teach physics to IIT aspirants. I had been thinking of leaving for a while. It is the teachers who train the students to crack IIT exams and they need to be heard. I refused counter offers, took Allen’s blessings and left within a week," Bhargava says.
His exit turned the spotlight on the poaching wars in the coaching city.
According to Naveen Maheshwari, one of the directors of Allen, Bhargava was not the only one – 40 other teachers left with him. “We trained them and they left with a few days’ notice. We hear annual salaries of ₹20 crore-plus are being offered to these teachers. Do the VC firms backing these online centres know that their money is being used to pay teachers?" Maheshwari says in anger. Unacademy did not respond to queries about how many Allen teachers it has hired. In June, it announced its plans to enrol up to 15,000 students in the first batch of offline centres across nine cities.
Allen is the biggest player in Kota, with 22 massive multi-storied centres, where thousands of students spend 18 hours a day training for tests. It is expected to enrol a record 1.25 lakh students this year —more than 70% of students in Kota. But it is bristling at the challenge thrown by Unacademy.
Last month, Allen reportedly slapped a legal notice on at least 20 teachers who jumped ship to Unacademy, accusing them of breach of contract. According to executives in Allen and Unacademy, who did not wish to be named, some of the cases have been dismissed by a Jaipur court, but the matter is yet to be resolved. Bhargava was one of those taken to court, Mint has learnt.
Bhargava denies that he has been hired at an astronomical salary of ₹20 crore a year. “Yes, I will be paid many times what I used to earn, but it is not that high. Allen, too, had hired me from Bansal sir’s institute (V.K. Bansal’s Bansal Classes) in 2008 at twice or thrice the salary. So, what wrong have I done now?" asks Bhargava.
Teacher vs teacher
The battle for the teachers is really about the students.
This year, about 2 lakh students are expected to troop into the city to train for the tests that have opened doors to middle-class ambitions for decades now—JEE Main, JEE Advanced (for IIT admissions) and NEET (for medical admissions). The pandemic lull of two years, when coaching institutes were forced to move online and when students were drawn to edtech firms, appears to be over. As students stream back to classrooms, Unacademy and Physicswallah have pivoted to the offline mode but there is not enough time to train teachers. Hence. the mad rush.
As anxious parents and students arrive at the Kota railway station every day, even well-established institutes like Allen cannot afford to lose prized teachers. As anyone familiar with Kota’s history would know, that is followed by an exodus of students, a leak that turns into a deluge.
And so, the moment a student disembarks at the Kota railway station, the coaching industry kicks into action. From rickshaw-wallahs paid to direct students to coaching centres, to hostels that take a cut from institutes to give priority to their students, everyone is involved. “Rickshaw-wallahs get ₹ 500 to take the parents to the institute and ₹ 3,000 if the admission happens. There is a similar agreement between hostels and coaching institutes," said Rajesh, a rickshaw driver.
The major coaching institutes in Kota today are Allen Career Institute, Vibrant Academy, Motion Education, Resonance Eduventures, Reliable Institute (now backed by Allen), BYJU’s-owned Aakash Institute, Career Point, Unacademy, PhysicsWallah (PW) and Bansal Classes.
The entrance of new players appears to also have sparked an unofficial price war. Students have told Mint that ed-tech firms like Unacademy are promising to absorb students from older and more prominent coaching centres at discounted fees—if they move over.
Students typically have to pay between ₹ 1.2 lakh and ₹ 1.5 lakh for a year. If the student decides to leave the centre within the first 15 days, then he/she has to forgo 15% of the fees. However, if the student then shows the payment slip to Unacademy, he gets to enrol for as little as ₹ 5,000 a year. PW, too, is offering a deep discount that is similar to Unacademy’s, students and teachers both said. Unacademy and PhysicsWallah did not respond to Mint’s queries about this.
For students, all of this means more options—and some confusion. “My teacher is still with Allen so I will continue my studies here," said Kanishka Nagar, who has moved from Baran, 80 km from Kota, to study for his IIT entrance test. His brother is studying at Resonance; both decided to study in different coaching centres to get the best of Kota. Like many families, Kanishka’s mother decided to move with her children to Kota while his father runs a shop in Baran.
The other players
The silence is eerie, compared to the hum of classrooms elsewhere. Here, in this building, Sameer Bansal teaches a handful of students—a far cry from the time Bansal Classes would be where the best of IIT-JEE aspirants landed up. Sameer’s father, a former IITian who passed away last year, had set up Bansal Classes in 1984. It is said that most of the established coaching centres in Kota are offshoots of Bansal Classes, as the teachers were either students or trained by ‘Bansal Sir’. “D2 has happened to Bansal Sir many times before," says Sameer, referring to the many teachers who jumped ship and went on to start their own academy or joined others.
Like Pramod Maheshwari, who was taught by Bansal ‘Sir’ and who set up Career Point in 1993. The textile engineer from IIT-Delhi, too, is hassled by the ongoing tussle among institutes. He says he has lost Career Point teachers to PhysicsWallah, which, he says, is offering students coaching at an annual fee of ₹35,000, but picking up teachers at high salaries. One of his teachers who earned ₹5 lakh a year was hired by PhysicsWallah for ₹45 lakh, he says. “Not just faculty, even admin staff is being taken away," says Pramod. “Kota’s story cannot be about this new rivalry. Competition has always been there but this is now dirty," he added. a PhysicsWallah spokesperson did not respond to a query emailed by Mint.
A Kota teacher’s annual salary ranges from ₹5 lakh to upwards of a few crores, depending on experience and popularity. But the current payouts are unsustainable, says Pramod. He wants to build a new business model where students do not have to pay high annual fees. “You can train them at ₹45,000 per year. Teachers’ salaries need to be capped at ₹15 lakh. There are good teachers who may not be the famous ones but will get the job done," he says.
Old game, new rules
In 1988, Rajesh Maheshwari started the Allen Career Institute—the name a catchier version of the initials of his father L.N. Maheshwari. It is still run by four brothers—Rajesh, Govid, Naveen and Brajesh Maheshwari.
By far, it is the Goliath in this battle. From 90,000 students in 2020, it expects 1.25 lakh students to register for its classes this year. Industry observers say Allen continues to hold the aces. It has a few decades of teaching behind it and has played the game many times before.
But it has realized that it needs deeper pockets to compete with VC-funded startups. For instance, Unacademy was valued at $3.4 billion in the latest fundraise that closed in August 2021. On Monday, however, founder Gaurav Munjal informed his employees that the company will resort to a round of cost restructuring and embrace frugality.
Allen recently gave up 36% of its stake to Bodhi Tree Systems, the equally owned joint venture between James Murdoch’s Lupa Systems and former Walt Disney Asia Pacific chief Uday Shankar, for $600 million.
To retain faculty, it has to increase salaries and allow teachers a larger share of the pie through employee stock options, or ESOPs. This June end, Allen turned from a family-run business to a privately held company and is now Allen Career Institute Pvt ltd.
“We will also give ESOPs to our teachers. Let it be known that Allen is the best paymaster in Kota," says Maheshwari. He claims that several teachers have rejected offers from rivals even after signing the contracts. “One was dragged to our office by his wife so that he can apologize. This is like a family. But one must remember that when you are in the army, medicine or education, no one can break discipline," he says.
As he steps out of his office, a student and his father bend down to touch his feet. He blesses them and walks past. It is 7 pm, the admission counter at Allen has just shut. But outside, in the city of IIT-JEE dreams, parents and students are still on the hunt.
