Elevate Campuses’ Borrowings Rise, Two-Thirds Are Floating

Elevate Campuses’ total pre-acquisition borrowings rose to Rs 4,120.534 crore at March 31, 2026 from Rs 1,206.596 crore a year earlier, while Rs 2,744.559 crore, or 66.61%, carried floating rates. The reported 4.98-times net-debt-to-EBITDA measure also included a Rs 109.442 crore gain from selling a hostel undertaking.

How much did Elevate Campuses’ borrowing rise?

Elevate Campuses’ pre-acquisition total borrowings increased by Rs 2,913.938 crore, or about 3.4 times, between March 31, 2025 and March 31, 2026. The increase was concentrated in non-current borrowings, which are obligations due beyond one year: they rose to Rs 4,003.225 crore from Rs 1,183.729 crore. Current borrowings, due within one year, also rose to Rs 117.309 crore from Rs 22.867 crore over the same period.

The post-acquisition group’s pro forma total was Rs 4,832.251 crore at March 31, 2026, Rs 711.717 crore above the pre-acquisition group’s reported total for that date. This presentation shows the additional debt scale in the post-acquisition group, although the disclosed figures do not allocate the difference between individual acquired entities or financing transactions. Both March 2026 totals include Rs 1,050 crore of convertible debentures, debt instruments that may convert into equity under their terms.

Why is Elevate Campuses exposed to floating rates?

Elevate Campuses is exposed because Rs 2,744.559 crore of its March 31, 2026 borrowings carried floating interest rates, equal to 66.61% of total borrowings of Rs 4,120.534 crore. Floating-rate borrowings were 100% of total borrowings at March 31, 2025 and March 31, 2024, when the respective totals were Rs 1,206.596 crore and Rs 984.711 crore. The percentage declined in FY 2026 because the capital structure included Rs 325.973 crore of fixed-rate borrowings and Rs 1,050 crore of convertible debentures.

The interest cost on the floating portion can reset with benchmark rates, including the marginal cost of funds based lending rate, repo-linked lending rates and other market-linked indices. The repo rate is the Reserve Bank of India’s policy lending rate, while the marginal cost of funds based lending rate is a bank lending benchmark. Elevate Campuses has not entered into hedging arrangements, contracts intended to reduce the effect of adverse interest-rate movements, so a benchmark-rate increase can raise finance costs without a corresponding contractual offset.

The disclosed exposure is therefore a cash-flow issue as well as an accounting-cost issue. A rise in rates would increase interest obligations on the Rs 2,744.559 crore floating-rate balance unless the balance is repaid, refinanced, converted, or its rate structure changes. For the impact to remain manageable, cash generated by operations and other capital resources must be sufficient to meet interest, principal and other contractual requirements as they fall due.

Why does the 4.98-times leverage measure need context?

Elevate Campuses reported net debt to earnings before interest, tax, depreciation and amortisation, or EBITDA, of 4.98 times in FY 2026, compared with 2.71 times in FY 2025 and 3.32 times in FY 2024. Net debt is total borrowings less cash and cash equivalents, bank balances, qualifying fixed deposits and current investments under the company’s stated definition. EBITDA is a profit measure that adds tax, depreciation, amortisation and finance costs back to restated profit for the year.

The FY 2026 ratio needs context because Elevate Campuses says it reflects a Rs 109.442 crore gain on sale of a hostel undertaking. That gain lifted FY 2026 reported EBITDA to Rs 544.998 crore, compared with Rs 256.403 crore in FY 2025, while total borrowings rose more sharply to Rs 4,120.534 crore. Elevate Campuses states that net debt to EBITDA excluding the hostel-sale gain was 26.23 times on a restated basis, rather than the reported 4.98 times.

The difference arises because the sale gain forms part of the reported FY 2026 earnings measure used in the ratio. Removing it lowers the denominator, EBITDA, while net debt continues to reflect borrowings net of the specified cash and investment balances at March 31, 2026. The gain was connected to the sale of a hostel undertaking, so it is not recurring operating income that would automatically be available in later financial years.

What could limit Elevate Campuses’ debt servicing?

Elevate Campuses’ capacity to repay or service debt depends primarily on cash generated by the business, and its financing agreements contain financial and restrictive covenants. These covenants can require lender intimation or consent before actions including changes in capital structure, shareholding, ownership, management or control, amendments to constitutional documents, mergers, amalgamations, compromises, reconstructions, and prepayment of a credit facility. Elevate Campuses reports no material non-compliance with such covenants that adversely affected results during the three financial years through FY 2026.

A failure to service secured borrowings could allow lenders to enforce security and dispose of assets to recover amounts due. If operating cash flow and other capital resources are inadequate, Elevate Campuses says it could need to sell assets, restructure debt or refinance it; refinancing could carry higher rates or more restrictive covenants. Elevate Campuses intends to repay or prepay part of bank and financial-institution debt from net proceeds, but it also says it may incur additional indebtedness over time.

Conclusion

Elevate Campuses entered FY 2026 with a materially larger debt base: pre-acquisition borrowings reached Rs 4,120.534 crore and the post-acquisition pro forma total reached Rs 4,832.251 crore. Two-thirds of the pre-acquisition debt was floating-rate, no interest-rate hedge was in place, and the reported 4.98-times net-debt-to-EBITDA result incorporated a Rs 109.442 crore hostel-sale gain that Elevate Campuses separately identifies as consequential to the measure.

The next items to watch are execution of the stated plan to repay or prepay part of debt from net proceeds, the treatment of Rs 1,050 crore of convertible debentures, and future benchmark-rate movements affecting the Rs 2,744.559 crore floating-rate balance. Continued compliance with lender covenants and the ability to generate cash sufficient for interest and principal payments will determine whether the higher March 31, 2026 borrowing level can be reduced or refinanced without further constraints.