Housing finance major, Housing Development Finance Corporation (HDFC) has decided to make an entry into the education sector of the country. The group will soon be ready with its plan layout for the venture, said HDFC Chairman, Deepak Parekh.

The group plans to focus small towns wherein it would either set up schools or take over weak performing boarding schools. "The opportunity is huge, as the need for quality education will only increase. Parents in even rural areas want to give their children a good education. Higher education is also on our radar," Parekh said.

HDFC will set up a separate subsidiary for this venture. "No one would mind if one makes a moderate profit by providing quality education," Parekh said.

Many schools are also looking forward to a model which is scalable and profitable at the same time. Operation via trusts makes profit making a difficult task. The 'takeover model' as planned by HDFC is thus quite a lucrtative option for many schools.

"Many missionary trusts or individual families, which have been running institutions the conventional way, are now exploring the private equity route of raising funds. Also, with parents giving importance to factors like a school's infrastructure (both physical and IT), curriculum and extra-curricular activities, educational institutions are choosing various parameters to build their brands," said a Mumbai-based analyst.

HDFC has raised its stake in its education loan wing-Credila Financial Services to 51% this July.