Daybreak - The great B-school placement drought is hitting Masters' Union where it hurts

Episode Date: July 9, 2024

Students pay hefty fees for an alt MBA from Masters' Union with the confidence that by the end of the course, they will be one step closer to their dream job, and more importantly their dream salary. Except, that isn’t what ended up happening for a majority of students in the batch of 2024. Classes ended a few weeks ago and most of the students are yet to land job offers.You see, it has been a tough year for India’s business schools. Even the IIMs and ISBs of the world have struggled to get a majority of their students placed at top companies. And in this tough climate, Masters’ Union, which has always positioned itself as a challenger to the IIMS, is facing a bigger crisis than any of its peers. Because placing its students isn’t just a matter of pride for the company, it's also crucial to its financial model. Tune in. 

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Last year, close to 200 students sat in the crowd

as Master's Union founder Pratham Mittal delivered his inaugural address to the batch of 2024. Now, all of the students, 199 of them to be specific, had signed up for the ALT MBA school's very popular flagship postgraduate program, or PGP. At the inaugural event, Mithel did what anyone in charge of a premier educational institution would do.

He talked about how great his B school was. He said that in the placement's department, Masters Union fared even better than India's top B schools like the IIMs and ISB. And this didn't come as a surprise to the batch of 2020. After all, most of them had signed up for the course because of Masters Union's great track record. Industry exposure and great placements literally formed the very foundation of the Masters Union brand. Now, you may recall that in a special episode of Daybreak two weeks ago,

my co-host, Snigda and I told you about the Stoa School story. Now, Stoa was a trailblazer in the Alt-MBA space. The idea was to disrupt B-School education in India. And Disrupted did. Soon after it was launched, a bunch of other alternative business schools, including Masters Union, was set up in the country. Now, unlike traditional schools, these alt-MBAs were all about building networks and learning actual real-world skills.

Masters Union and its peers stressed on the fact that business education cannot happen in a classroom. So students sign up and pay hefty fees with the confidence that by the end of the course, they will be one step closer to their dream job. And more importantly, their dream salary. Except that isn't what ended up happening for a majority of students in the batch of 2024. Classes ended a few weeks ago and most of these students are yet to land job offers.

You see, it's been a tough year for India's business schools. Even the IIMs and ISBs of the world have struggled to get a majority of their students placed at top companies. And in this tough climate, Masters Union, which has always positioned itself as a challenger to the IIMs, is facing a bigger crisis than any of its peers. Because placing its students isn't just a matter of pride for the company. It's also crucial to its financial model.

Pratam Mital says that the average cost to company or CTC of any year's batch becomes the fees for the next year's incoming batch. And if that's really the case, then Masters Union aspirants may be in luck next year. Because 50% of its current postgraduate program or PGP batch is yet to be placed. But with four months to go till convocation, Master's Union founder Mithal still seems optimistic about hitting that 100% placement mark. And he's pulling out all the stops to make it happen.

Welcome to Daybreak, a business podcast from the Ken. I'm your host Rahel, Philip Post and I'll be joining Snigda every week to bring you one business story that is worth understanding and worth your time. Today is Tuesday, the 9th of July. Let's take a look at where things stand for Master's Union batch of 24. Like I mentioned earlier, classes have come to an end. When many students are staying put in their hostels in Guru Graham awaiting job offers before

their graduation ceremony in November. About 47 students are grinding away at internships, while another 26 have snagged founder fellowships. But actual job offers are few and far between. Sure, ISB and IIMs are facing the same problem, but what they have going for them is a solid aluminai network. Not to mention a solid reputation that generally gets a couple major recruiters knocking on their doors every single time, Kamran or shine. Meanwhile, Master's Union, which is only four years old, has to take a more hands-on approach. A former employee told the Ken reporter Alifia Kharan, that Masters Union has directly been calling companies to place its graduates.

You see, the bottom line is that the Alt MBA isn't just trying to get its students' jobs, but said jobs also have to be well-paying because its financial model depends on it. Like one ISB official told Elfia, securing a couple jobs with a CTC of 15 to 16 lakh is simple enough. You just have to use your network. But placing everyone at 25 lakh rupees and above is a whole. whole other ballgame. Again, the fees for the next year's batch is dependent on the average CTC. So the current batch, the batch of 25, sheld out about $29 lakh rupees each in tuition,

plus a monthly $36,000 for Porsche hostels. The tuition fee is $9,000 higher than what the first batch paid back in 2020. Master's Union obviously won't want to reverse that upward trajectory, so great placements are key here. So the Alt MBA school is going all out. Apart from calling companies directly, Masters Union has also hired nine new people, all of whom are seasoned professionals from top consulting firms like Boston Consulting Group

and other senior corporate leaders. They all have one main KRA, to maximize PGP placements. And that's not it. It takes one glance at Master's Union founder Pratam Mittal's Google Calendar to know that he is not a backseat driver in times of crisis. He has

regular one-on-one sessions with students. All of this, while he tries to launch yet another experiential business school, only overseas. One thing Masters Union and its leadership have no dearth of is ambition. The PGP

course is only one of its projects, although it's more successful. It's also constantly introducing other courses and expanding its business. But unfortunately, it seems to be buckling under the weight of its own ambitions. More on that in the next segment.

At the outset of 2024, as admission started for Masters' Union's PGP, Mithel set an ambitious target for his team to secure 10,000 applications. But, spoiler alert, it fell significantly short of that goal. Only about 3,000 applications landed. Then the target for final admissions was set at 300. But eventually, only 233 ended up job. joining the class of 2025. Perhaps word got out about

Master's Union's poor placements for the previous batch. But Mital was thinking ahead. After the way the placement season played out for the previous batch, he decided to cap admissions at 233. He told the Ken that his goal was not to get a massive batch of students. It was to ensure that each student got the full experience, ending with a great placement. Mainly because that would mean better rankings for Masters Union.

You see, his ambitious goal is for it to be among the top 10 B schools in the world. And international ranking agencies typically consider diversity, work experience and placements. Critical metrics that Masters Union focuses on safeguarding. Mittal also seems to be worried about the ripple effect of an underperforming PGP on his other revenue streams. Besides its PG program, Masters Union also has an undergrad program, an executive alt-MBA program called PGP Rise and MasterCamp, which offers online masterclasses in partnership with corporates. The health of MasterCamp is vital because it is Masters Union's second largest income source.

It was heavily criticized by students last year for failing to meet their placement expectations. Mithl admits that he hasn't yet fully cracked the code for MasterCamp. The expectations of students and placements just aren't fully aligned. but he insists that the company is completely transparent about placements. Some former students beg to differ. One student told Alifia that the company misrepresented its placement stats on its website. And then comes its latest initiative, undergraduate courses. The brochure promises a Bachelor of Management Studies

or Bachelor of Commerce degree from Delhi University. But funny enough, D.U's vice-chancellor, Yokesh Singh, clarified that no such tie-up exists. Mithal said that the company has signed an MOU with D.U's school of open learning. But he also went on to quite frankly admit that that was mainly to comfort nervous parents because anyone can enroll in open learning. But he added that Masters Union's UG students now in their second year are interning at top companies, many of which also participate in PGP placements.

Now, both the UG and PGP-RISE programs, both launched in 2023 to 24, are yet to report any placements. But despite all of that, Mittal is going all out to generate interest in these new revenue streams. Besides eyeing global expansion, the Alt-MBA school is prepping to roll out a business family degree, initially targeting 50 students. Yet he concedes that the flagship program, the PGP,

remains the face of Master's Union. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippo's produced by me, Snigda Sharma, and edited by Rajiv Sien.