Pursuing an MBA in India is often seen as the first step towards a lucrative career. From leadership roles in top firms to moving into your entrepreneurship journey, an MBA givers you everything. It provides students with the right set of skills and networks required to thrive in today’s competitive business scenario. However, the decision to pursue this degree comes with a heavy financial commitment. For a few of us, the cost of an MBA becomes a question of giving up the dream of pursuing an MBA. Therefore, the concept of Return on Investment (RoI) is extremely important and is subtly considered while picking a college. In this article, we will explore the RoI of MBA in India, how to calculate it in detail and highlight some of the best Indian MBA colleges offering good returns. Further, we will also discuss how you can maximize your RoI while pursuing your dream to pursue an MBA.
What is ROI in the Context of MBA in India?
In very simple terms, RoI refers to the financial and strategic return to an investment. In the context of an MBA, it includes financial return as well as career returns you get after completing an MBA. It is often compared to the investment you make in terms of tuition fees, living expenses and lost income (if applicable becomes the opportunity cost). In India, where MBA program costs vary widely from a few lakhs to over INR 30 lakhs, it becomes very critical to understand the returns a program offers.
The formula to calculate return on investment (ROI) is as follows:
RoI = (Post-MBA Salary – Pre-MBA Salary) ÷ Total Cost of MBA × 100
For example, you can calculate like:
- Pre-MBA Salary: INR 6 LPA
- Post-MBA Salary: INR 20 LPA
- Cost of MBA: INR 20 lakh
RoI = (₹20,00,000 – ₹6,00,000) ÷ ₹20,00,000 × 100 = 70%
A higher RoI always hints that a program delivers better and quick financial returns. However, there are other factors that cannot be turned down. These include skill development and career switch which you should also factor in to know the actual benefit of an MBA program.
Factors Impacting MBA ROI in India
Several factors which overall affect the RoI of an MBA in India include the following:
Program Fees
MBA fees in India range from as low as 2 to 6 lakhs for government colleges like FMS Delhi University or JBIMS Mumbai to 20 to 30 lakhs in top IIMs or private B-schools such as ISB Hyderabad and SPJIMR Mumbai. Lower fees surely mean a better ROI, however considering other factors becomes necessary too.
Salary Increment Post-MBA
The jump in salary that you see after completing your MBA plays a significant role in calculating your MBA’s ROI. MBA holders from top-tier colleges like IIMs or XLRI can see their salaries increase 3-5 times after the degree. Sometimes, the jump is even more significant, making the ROI better despite higher fees.
Industry and Job Role
Professionals entering high-paying sectors like consulting, investment banking or product management tend to see better RoI compared to those in other lower-paying fields. It also depends on the the institute as salary sometimes vary even within the same role.
Geography
If your college is in a metro city like Mumbai or Delhi NCR, your travel cost in 2 years of MBA reduces significantly. Additionally, if you are posted in these cities post your MBA, you may incur a higher cost of living, impacting your ROI calculations.
Duration of the Program
One-year executive MBA programs like the one offered at ISB reduce the opportunity costs as they allow professionals to quickly re-enter into the corporate world. Two year MBA programs offer more opportunities but it does come with an additional cost to it.
Brand Value of the Institution
A college with lower fees may not fetch you the best ROI if the brand is not recognised. Top MBA colleges like IIM ABC or XLRI has amazing placement opportunities despite having a hefty fee. Therefore, understand that you should not be running behind colleges only with lower fee.
Best MBA Colleges With High ROI
Some Indian MBA colleges have been consistently delivering excellent RoI due to their affordable fee structure along with good placement figures. Below is the list of such colleges which you can target:
1. Faculty of Management Studies (FMS), Delhi
- Program Fee: 2 lakhs
- Average Placement Salary (2023): ₹34.1 LPA
- Key Highlight: Undoubtedly, FMS Delhi has the best ROI in India and probably abroad too. It is one of the top-ranked institute where all the major firms visit every year, offering amazing career growth.
2. IIM Ahmedabad/Bangalore/Calcutta
- Program Fee: Around 25 to 30 lacs
- Average Placement Salary (2023): Around ₹34 LPA
- Key Highlight: Though the initial fees for these institute are high but the long-term benefits like alum status and brand values make them a preferred choice.
3. IIM Lucknow/Kozhikode/Indore/Mumbai
- Program Fee: Around 20 – 25 lacs
- Average Placement Salary (2023): Around ₹28 – 30 LPA
- Key Highlight: These are the best IIMs of the country after the holy trinity – ABC. The brand value, academic curriculum and industry connects make them the best.
4. Jamnalal Bajaj Institute of Management Studies (JBIMS), Mumbai
- Program Fee: 6 lakhs
- Average Placement Salary (2023): 28.02 LPA
- Key Highlight: Located in the financial capital, JBIMS is often regarded as the CEO Factory. Known for its specialisation in Finance, JBIMS has been consistently providing quality education at an affordable fee structure. Additionally, a smaller batch size of JBIMS offers focused education and one can have ample opportunities.
5. Tata Institute of Social Sciences (TISS), Mumbai
- Program Fee: 2.43 lakhs
- Average Placement Salary (2023): 27.22 LPA
- Key Highlight: TISS is known for its strong emphasis on social responsibility through its MA program in the fields of Human Resources and Labour Relations. Located in Mumbai, it comes with great exposure to all the students studying there. With a smaller batch size and an affordable fee structure, TISS is an ideal destination for HR enthusiasts of the country.
6. Department of Management Studies (DMS), IIT Delhi
- Program Fee: 11.2 lakh
- Average Placement Salary (2023): 25.82 LPA
- Key Highlight: IIT Delhi is one of the best IITs of the country not just for engineering but also for its MBA program. It enjoys locational advantages and with a reasonable fee structure, it is one of the lucrative programs to target for. The competition is getting intense every year due to the increased popularity of IIT Delhi.
7. Shailesh J. Mehta School of Management (SJMSOM), IIT Bombay
- Program Fee: 14 lakhs
- Average Placement Salary (2023): 28.88 LPA
- Key Highlight: SJMSOM, known for operations is now spreading its wings into other sectors and have started inviting non-engineers for its program. With placements as good as that of BLACKI IIMs, SJMSOM becomes one of the preferred colleges for a lot of aspirants appearing for CAT.
8. Department of Financial Studies (DFS), University of Delhi
- Program Fee: 26k
- Average Placement Salary (2023): 17.1 LPA
- Key Highlight: It is by far the most affordable MBA college in India. With just 63 students in the current batch, DFS enjoys amazing placement opportunities. Being in Delhi, makes it further convenient for students as well as recruiters. It is still somewhat underrated as this hidden gem is yet to be exploited to the fullest.
How to Maximize Your MBA ROI in India?
To ensure you get the most out of your MBA investment, consider the following tips to boost your ROI:
Choose the Right Program
Evaluate colleges based on multiple parameters like placement records, faculty, alumni network and industry connections. Do not just trust someone else’s opinion blindly or just go with the rankings. Choose what fits the best for you in every aspect.
Opt for Scholarships
Almost all the top B-Schools have multiple scholarships which you can apply for throughout the 2 years. These scholarships can be based on merit or need or a mixture of both. It is suggested that candidates looking forward to these opportunities should have a income certificate handy as it is required in most of the cases.
Specialize in High-Demand Fields
Industries such as data analytics, fintech and consulting are booming at an enormous rate in India. If you are interested in these fields or resonate with them, consider pursuing these as your career and move away from the traditional roles.
Leverage Internships and Live Projects
B-Schools have summer internships which can help you build your CV for the final placements in the second year. Focus on these two months and put your heart and soul as firms offer a pre-placement offer, inviting you to work with them once you graduate. Build network and connections in these two days with the industry veterans. Live projects also play an important role in your CV building. Try to diversify industries when looking for live projects.
Network Actively
Build professional as well as personal relationships with peers, alumni and faculties for long-term. MBA is best utilised later in your career, be it having mentors or friends or trying to switch jobs. These connections will prove to be priceless then.
Consider Executive Programs
If you have really high work experience and do not want to spend two years of your time in an MBA college, consider executive programs which will led to good savings in terms of opportunity costs.
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