For the first time in its history, the Graduate Management Admission Council has acquired a rival entrance exam used in India for an undisclosed sum. The exam, taken by roughly 45,000 test takers annually, was purchased outright from the Narsee Monjee Institute of Management Studies (NMIMS).
At about $35 a test, the NMAT exam costs just a fraction of the $250 GMAC charges test takers to sit for the GMAT. But the deal, announced today (March 11), gives GMAC greater marketshare in one of the fastest growing markets for management education in the world. The acquisition nearly triples the number of test takers in India for GMAC since only 25,268 GMAT tests were taken in India last year.
The acquisition is being made by GMAC Chief Executive Sangeet Chowfla, a former executive of Hewlett Packard, who assumed his role as CEO of GMAC in January of 2014. When he was named the head of the non-profit GMAC, it was with the understanding that the organization would need to expand especially overseas where growth is more likely. In recent years, an increasing number of GMAT test takers have come from outside the U.S., particularly in India and China where business has exploded, while the use of technology to administer the test has assumed greater importance.
India has potentially been one of the most lucrative markets for GMAC. But many of the newer business schools in developing economies do not require the GMAT—in part because of the test’s cost. Devanath Tirupati, dean of the Indian Institute of Management in Bangalore, estimates that as many as two-thirds of the global market for business programs don’t require the exam. “The GMAT is too expensive and not accessible,” says Tirupati, who notes that the cost of the more widely popular Common Admission Test (CAT) in India is about 1,500 rupees, or less than $25, compared to about 15,000 rupees for the GMAT. Nearly 175,000 students take the CAT annually in India which makes it a likely future acquisition target for GMAC.
GMAC PLANS TO IMPROVE ACCESSIBILITY TO THE EXAM IN INDIA
A GMAC spokesperson says there are no immediate plans to charge more for the NMAT exam. “We anticipate no changes in the way students will engage with the exam in 2015,” says Rich D’Amato, vice president of corporate communications for GMAC. “But we will look at improving the accessibility to the exam and develop some test prep materials for it.”
Currently, the computer-based NMAT is taken between October and December. GMAC will seek to expand the number of test centers where the exam can be taken as well as to allow test takers to take the exam throughout the year. D’Amato said that six additional schools in India beyond the Narsee Monjee Institute have agreed to accept the NMAT as part of their admissions process.
Along with the graduate management programs of NMIMS, Alliance University, SRM University, BML Munjal University, VIT University, ICFAI Business School (IBS) and Ansal University have agreed to accept the NMAT by GMAC exam for admissions to their graduate management programs. GMAC hopes to enlist more schools in India as well in the near future.
‘WE SEE GREAT OPPORTUNITY IN THE INDIAN MANAGEMENT EDUCATION MARKETPLACE’
The NMAT differs significantly from the GMAT. Unlike the GMAT, it is not a computer adaptive test. It can be taken in one and one-half hours, versus the three and one-half hour exam time for the GMAT.
“We see great opportunity in the Indian management education marketplace, which is one of the most dynamic education markets in the world,” said GMAC President Sangeet Chowfla in a statement. ”Our purchase of the NMAT exam furthers GMAC’s mission to help build the study of management education locally, regionally and globally, and to make admissions more relevant, accessible and successful for additional candidates.”
The NMAT exam was launched nearly 20 years ago by the Narsee Monjee Institute of Management Studies. “Over the last two decades since NMAT was conceived and launched, the test has become more candidate friendly and has steadily grown, especially after it evolved from paper pencil mode to computer-based,” explained Rajan Saxena, vice chancellor of NMIMS University, in a statement. “Our vision is to develop the NMAT into an industry standard test for India’s business schools. At NMIMS, we share GMAC’s vision of creating an admission test for the Indian management education market that makes management programs accessible to a more diverse pool of candidates.”
GMAC PLANS TO ENHANCE THE TEST TAKER EXPERIENCE AND ADD SOME NEW FEATURES
GMAC said that for students, the test and the process of taking the exam will remain the same. GMAC plans to improve some aspects of score reporting to schools that accept the NMAT by GMAC, and will, in subsequent years, incorporate additional features that will enhance the test-taker experience.
The NMAT by GMAC exam will be offered between October and December 2015, as previously scheduled, and registration will commence in July 2015. GMAC will continue to work with Pearson VUE — GMAC‘s global partner for delivery of the GMAT exam — to administer the exam. Pearson VUE has been delivering the NMAT exam since 2009, in partnership with NMIMS.