Dubai Billionaire Teams With Adani To Expand His GEMS Schools In India

Forbes

04-06-2025

Sunny Varkey, the Indian-born chairman of Dubai-based GEMS Education, one of the largest kindergarten-to-grade-12 private school networks in the world, has long-nurtured an ambition to make the GEMS brand known in his native country. Now he's found a well-connected partner to help him achieve his goal. Varkey is teaming up with Gautam Adani, India's second-richest person, to offer world-class, affordable education across the country with the target of opening 20 schools over three years.
GEMS will operate the schools via a 50-50 joint venture with Adani, who controls Ahmedabad-based ports-to-power conglomerate Adani group. The joint venture will be responsible for everything from management to teacher recruitment and training. While exact details of the tie-up are not available, the Adani Foundation has pledged to provide 20 billion rupees ($234 million) to be used to offer 30% of seats in some schools to less-privileged students for free. The first Adani GEMS School of Excellence has already opened in Lucknow.
Sunny Varkey and Gautam Adani
Courtesy of ADANI
Varkey's push into India—where he currently has just two schools, in Kochi and Gurgaon—comes as GEMS is riding high in its home market of Dubai, which is experiencing a post-Covid-19 influx of expatriates that has created rampant demand for everything from property to school seats. The 68-year-old entrepreneur, who built his education empire over more than four decades from just one school with 350 students, sees this as a golden chance to revive his ambitions to scale up the GEMS network of 92 schools in eight countries. 'We definitely have the capability, the ambition and the brand to exploit the opportunity,' he says in a rare interview at his spacious villa in the city's upscale Jumeirah district.
Varkey has earmarked $300 million for expansion over the next three years across the UAE, where the private education market is estimated to grow at a compound annual growth rate of 7.5% to $10.3 billion by 2030, according to Hyderabad-based market research company Mordor Intelligence. He plans to spend the bulk of the investment in Dubai, where expats—who make up 92% of the population, according to marketing firm Global Media Insights—do not have access to the public school system. Varkey has earmarked $300 million for expansion over the next three years across the UAE, where the private education market is estimated to grow at a compound annual growth rate of 7.5% to $10.3 billion by 2030, according to Hyderabad-based market research company Mordor Intelligence. He plans to spend the bulk of the investment in Dubai, where expats—who make up 92% of the population, according to marketing firm Global Media Insights—do not have access to the public school system.
'We definitely have the capability and the brand to exploit the opportunity.'
A third of the capital outlay will go toward the new ultra-premium GEMS School of Research and Innova­tion set to open in August in Dubai Sports City, a residential and sports complex located in the south of the emirate. With a campus spread across four hectares, it promises cut­ting-edge AI technologies and a host of amenities, from a robotics lab and a 600-seat auditorium to an Olympic-size swimming pool and even a helipad. Annual fees will be as much as $56,000 for the higher grades, which will be introduced in a few years.
GEMS School of Research and Innovation in Dubai Sports City.
Courtesy of GEMS Education
Presently, there are nearly 400,000 students of 185 nationalities enrolled in Dubai's private schools, according to the Knowledge and Human Development Authority (KHDA), the private school regulator. But that number is set to increase exponentially as expats continue to be drawn by Dubai's low-tax environment and stable economy. The government estimates the city's population will more than double to 7.8 million in 2040 from 3.3 million in 2024, That, in turn, is likely to fuel demand for so-called premium schools that promise high-quality education at nosebleed prices.
Last year, the emirate unveiled a strategy to upgrade Dubai's education system to world-class by 2033. The KHDA says it will approve at least 90 more private schools by then, compared with 227 as of January 2025, adding close to 50,000 school seats. Five private schools were launched in the 2023-24 academic year and ten more opened in 2024-2025, according to the KHDA. It says a further 20 applications are under review.
GEMS claims a 26% share of Dubai's private education market, based on enrolments, with more than 100,000 students across 28 mostly K-12 institutions, three of which opened in the past five years. Its schools follow the British, American, IB and Indian curriculums and annual fees start from $2,000. GEMS's Ebitda rose 12% to $380 million in 2024 from a year earlier, while revenue climbed 17% to $1.4 billion, according to estimates compiled by debt-rating agency Fitch Ratings. (Net profit wasn't available for this period.)
'We are still very UAE-centric,' acknowledges Dino Varkey, 44, the older of Varkey's two sons and GEMS group CEO (younger son Jay, 40, is deputy CEO), 'because our brand and brand equity are much more well-known in this part of the world.'
Dino Varkey, CEO of GEMS group
Courtesy of GEMS Education
Well-known enough to pull in a $2 billion investment in June last year from a consortium led by New York-based Brookfield Asset Management that includes Dubai financial services firm Gulf Islamic Investments, global private equity outfit Marathon Asset Management and the State Oil Fund of the Republic of Azerbaijan. 'The schools that GEMS runs in the UAE are amongst the most respected,' says Jad Ellawn, Brookfield managing partner and regional head in the Middle East. 'We feel very, very good about our investment.'
The structured deal gives the consortium preferred shares in GEMS, the value of which will be decided after an undisclosed period and based on the company achieving certain milestones, according to Varkey. While neither the educator nor Ellawn would reveal details, Dino says the consortium 'will have the same governance rights that you would expect for a significant minority stakeholder.'
The Brookfield-led group is the fourth investor consortium Varkey has tapped since 2000. 'Our biggest challenge has always been finance,' he says. 'You can only borrow up to a certain point.' While Varkey has explored the possibility of an IPO for GEMS in the past, so far it has not been necessary, he insists.
The month after the investors signed on, GEMS secured a $3.3 billion loan from a clutch of banks led by Dubai Islamic Bank, Mashreq, Abu Dhabi Commercial Bank and First Abu Dhabi Bank, further strengthening the balance sheet and helping pay off nearly $1.9 billion in debt. The financing accords also paved the way for the exit of a previous investor consortium, led by Luxembourg-based PE firm CVC Capital Partners, which backed GEMS in 2019.
Varkey, whose estimated fortune is $4 billion based on his stake in GEMS and after accounting for personal debt, says GEMS benefits from its dominant position and deep understanding of the UAE market. 'We are not coming from somewhere else, we know the market,' he maintains.
That may be, but competition is escalating. Britain's venerable Harrow International Schools tied up with Dubai-listed education provider Taaleem Holdings earlier this year to open two schools, one each in Dubai and Abu Dhabi. Likewise, London-based Nord Anglia Education, which has more than 80 schools across 33 countries, launched a school in Abu Dhabi in August 2023.
'We are not coming from somewhere else, we know the market.'
Sami Yosef, head of global research at London-based ISC Research, a provider of data on international schools (GEMS is a client), says there is room for more players. 'The UAE needs more schools, and there are waiting lists in so many schools.'
Still, the family is not complacent. 'We have to leverage our legacy and our position as the market leader to insulate ourselves against increasing competition,' says Dino.
Sunny Varkey grew up in the education business. His parents migrated to Dubai from the southern Indian state of Kerala in the late fifties and taught English before opening their own school in 1968. Varkey, who attended boarding school in Kerala from age 4, joined them when he was 11, but headed to the U.K. for one year of schooling before returning to Dubai to complete his final year of studies. He skipped college and entered Standard Chartered Bank in Dubai as a general clerk at age 19.
A couple of years later he launched a school building and maintenance company called Chicago Maintenance & Construction that remains part of his holding outfit, Varkey Group. In 1980, Varkey took over his parents' school and started expanding, opening 15 schools in the UAE over the following two decades. Thereafter, he began looking further afield with the ambition of making a global imprint.
The U.K. was the first market outside the UAE that Varkey bought into, acquiring more than a dozen schools there in 2003, including ten from rival Nord Anglia. The country, where he operates mostly under the Bellevue brand, remains his biggest market beyond the Middle East.
Elsewhere, however, his forays have produced mixed results, including in his native India. Over five years starting in 2011, Varkey bought a nearly 35% stake in Chennai-based edtech company Everonn Education, but the firm went into liquidation in 2016, something he declines to comment on.
There were also greenfield forays into Singapore, Malaysia and Kenya over the past two decades that he exited after a few years. 'I should have done more acquisitions rather than doing greenfield ventures,' he says in hindsight. 'You take a few years to get the land, a few years to construct, and then a few years to break even. It was the wrong thing to do.'
A GEMS school in Switzerland closed in 2019 and its leaseholder sued a Cayman Islands-based arm of GEMS for unpaid rent. The Luxembourg-based financial holding company, Meigerhorn, was awarded 63 million Swiss francs ($77 million) plus interest and other costs in 2022, and the Caymans entity was subsequently put into liquidation. GEMS declined to comment on the case.
The Covid-19 pandemic tested Varkey's resilience as schools were shut down, enrolments stalled and GEMS offered fee concessions to parents who had lost their jobs. While virtual classes continued during Covid, the company lost out on other lucrative income streams during that period, such as transportation and catering services, both of which recovered once schools reopened in August 2020.
'Sunny is a fighter and has deep knowledge of every aspect of the education business,' says V. Shankar, cofounder and CEO of Dubai-based PE firm Gateway Partners, who was previously on the board of the Varkey family's philanthropic arm, the Varkey Foundation. 'He's hard working, hard-charging and a consummate entrepreneur.'
Varkey has to contend with lingering challenges in the UAE, including higher construction and operating costs and a shortage of skilled workers, according to a 2023 industry report by Dubai-based investment banking advisory firm Alpen Capital. Varkey maintains that GEMS, which has 24,000 employees, is a sought-after employer, saying the company 'gets around 600,000 applications a year for about 2,200 vacancies [in teaching, administration and management].' In May, the KHDA announced a ten-year golden visa for private education professionals to help address the shortage.
Another potential snag: The individual emirates regulate private school fees, which could crimp profitability. But ISC Research's Yosef says regulation 'is also part of what has made the UAE's private education sector both attractive and resilient, creating stability for families and predictability for investors.'
As part of his expansion plans, Varkey, learning from past missteps, says he will also adopt an asset-light strategy. A key component of this is a consulting business in which GEMS partners with governments, wealthy individuals or other schools by contributing its expertise rather than capital. 'The consulting business will be a game-changer,' says Varkey confidently. GEMS has invested $50 million in developing what it calls a School Support Centre in Dubai that provides guidance on everything from running programs for gifted children and training teachers to performance audits and crisis management.
Despite a self-confessed aversion to studying in his youth, Varkey's enthusiasm for the business of schooling remains undimmed. 'We have to make sure we continue to lead the sector,' he says. 'We have to be a company that everyone wants to be a part of.'