What is MBA Return on Investment (ROI)?
Before choosing an MBA college, it is very important to know the ROI of degree obtained from that college. Read below to know what is MBA ROI, how it is calculated and what impact it has on your career. Also get the list of college for MBA with highest ROI.
What is MBA ROI?
What is MBA ROI? It is important for every management aspirant to know MBA ROI, so that they can choose the best suited B-School for pursing the course. Today, MBA is one of the most popular professional degree across the world for its lucrative career trajectory and handsome pay packages. However, management programme is in itself an expensive affair. The MBA course fee at a college with good infrastructure and faculty is minimum INR 10 lakh. The MBA fee goes up to as high as 30 lakhs+.
While on an average each student spent nearly INR 7-10 lakh on a two-year MBA programme, the salary offered after the course does not always match the investment. A majority of MBA graduates have difficulty in finding jobs because salary offered to them is not enough to repay education loan they had taken for the programme.
Also Read:
- What is MBA ROI: How to calculate best ROI for MBA?
- Factors Affecting MBA ROI
- Factors to Consider for Calculating MBA ROI
- Best ROI - MBA Colleges in India
- Why ROI is Important?
What is MBA ROI: How to calculate best ROI for MBA?
The right way to calculate the MBA ROI i. e. Return on Investment, of an MBA degree is to estimate the annual increase in salary and figuring out how many years will it take to recover the student loan/ investment through salary increases over a period of 10 years. The MBA Return on Investment calculation should also take into account pre-MBA and post-MBA work experience, EMIs, market conditions and so on.
The formula for ROI can be understood as: (profit minus cost) / cost.
Example:
If your pre-MBA salary is INR 500000, your post-MBA salary is INR 1500000, and the total cost of the MBA is INR 1200000, then:
ROI = (1500000 - 1000000) x 100 = 41.66 %
1200000
Best ROI on MBA can be considered the one, in which a candidate can get the amount invested in the shortest time from their salary/job secured on the basis of the degree. While, comparing ROI in an MBA programme with salary offered in campus placements, does not provide a correct picture, it nonetheless gives an idea of the MBA ROI. Among top MBA colleges in India, FMS Delhi, TISS Mumbai and IIT Bombay (SJMSOM) have the best MBA ROI.
Discover top MBA colleges explored by similar minds
Students like you who showed interest in this article are also exploring the following colleges
Want better recommendations?
There is a 90% more chance of getting best college recommendations by sharing preferences.
- Chat with our counselor
- Get your personalised list of colleges & exams matching your preferences
While calculating the ROI of an MBA course, one should take into account three aspects:
Cost of MBA: this includes course fee, living expense and lost income (opportunity cost of not working for the course period).
Financial Return: The ROI incluses salary hikes, bonus and incentives and career advancement opportunities after completing the degree.
Strategic Return: Benefits like wider career prospects, industry networking, upskilling and personal growth for long term success.
Factors Affecting MBA ROI
There are some factors that affect MBA ROI year on year. The profitability of an MBA programme, is measured in long term. One needs to keep the following mind.
- Tuition fee: The average fees of the course.
- Starting salary: Companies often offer decent starting salaries in campus placements.
- Signing bonuses: Some colleges may offer signing bonuses. The amount can help in study load repayment.
- Salary increase rate: On an average, it is seen that the minimum salary increase every year is atleast 3 percent.
- Opportunity cost: If a candidate decides to drop a year after completing MBA, they tend to lose money in loan repayment as well as lose prospective income.
Factors to Consider for Calculating MBA ROI
Before choosing an MBA college to pursue the degree one should evaluate the ROI prevent financial loss. One usually takes education loan to pursue MBA. The best ROI is when they can repay the loan in the shortest time after completing the programme.
1. B-School Ranking: Top B-schools have higher placements with higher salaries. Mid-tier and low-tier colleges may not get you the best ROI if their fee is high but placement rate is not good.
2. Career Goals: Evaluate your career goal viz. the MBA degree. Your decision to pursue MBA should directly support your career in the long term.
3. Cost of Living: College expenses and the cost of living in that city is an important consideration while evaluating the MBA course/college.
4. Financial Aid: Evaluate MBA fees and loan options to understand how much financial burden will you have to handle during and after completion of the course. And how quickly can you recover from it with your salary.
5. Market Conditions: External factors like job market or economic condition are important considerations while evaluating ROI. Unpredictable market conditions can cause major dent.
There are multiple components included in the total course fee such as tuition fees, hostel charges, admission fees, security deposit, etc. The table given below mentions the course-wise MDI Gurgaon PGDM fee:
Course | Total Tuition Fee |
|---|---|
PGDM-BM | INR 23.54 lakh |
PGDM-BA | INR 8.25 lakh |
PGDM-PPM | INR 4.84 lakh |
NOTE: The above-mentioned fee is taken from external sources. Hence, is indicative. Students are advised to contact the admission department of the institute.
The IIM Bangalore fees for the MBA course is INR 12.5 Lacs - INR 24.5 lakh. The accepted entrance exam for admission to the IIM Bangalore is CAT. Candidates willing to get admission must first register for the CAT exam. Then, with valid scores apply on the official website of the college. Pay the fee in time to avoid late fee submission charges.
Best ROI - MBA Colleges in India
Here’s a list of a few top B-Schools in India, their fees and salary package offered in campus placement, to compare and find out MBA with highest ROI. Take a look:
| Institute |
MBA/PGDM Fees |
Highest package offered* |
Average Package offered* |
|---|---|---|---|
| INR 25.00 lakh |
INR 1.46 CPA |
INR 34.45 LPA |
|
| INR 24.50 lakh |
NA |
INR 35.92 LPA |
|
| INR 27.00 lakh |
1.20 CPA |
INR 35.07 LPA |
|
| NR 20.50 lakh |
INR 72.02 LPA |
INR 29.20 LPA |
|
| INR 20.70 lakh |
INR 65.00 LPA |
INR 30.00 LPA |
|
| INR 21.17 lakh |
INR 1.00 CPA |
INR 25.68 LPA |
|
| INR 2.00 lakh |
INR 1.23 CPA |
INR 34.10 LPA |
|
| INR 26.00 lakh |
INR 63.30 LPA |
INR 24.20 LPA |
|
| INR 21.52 lakh |
INR 85.40 LPA (international) INR 76.50 LPA (domestic) |
INR 29.10 LPA |
|
| INR 28.00 lakh |
INR 75.00 LPA |
INR 29.89 LPA |
|
| INR 21.00 lakh |
INR 81.00 LPA |
INR 33.00 LPA |
|
| INR 25.00 lakh |
INR 67.70 LPA |
INR 25.30 LPA |
|
| INR 6.10 lakh |
INR 87.12 LPA |
INR 26.12 LPA |
|
| INR 17.50 lakh |
INR 71.50 LPA |
INR 26.10 LPA |
|
| INR 19.50 lakh |
INR 43.69 LPA |
INR 19.43 LPA |
|
| INR 17.90 lakh |
INR 48.25 LPA |
INR 19.27 LPA |
|
| INR 17.20 lakh |
INR 37.80 LPA |
INR 18.69 LPA |
*The salary figures mentioned in the table are as per the latest placement data avaiable.
The total Executive PGDM course fee is cumulative of several fee components, including tuition fee, security deposit, alumni fee, library charges, etc. Some of the fee components may be refundable. Tabulated below is the IIFT Delhi fee for Executive PGDM programmes:
Executive PGDM Course | Total Fee* |
|---|---|
EPGD-GHRM | INR 4.5 lakh |
EPGDIB | INR 4.85 lakh |
NOTE: The given fee is taken from the official website/sanctioning body. It is subject to change and hence, is indicative.
The total tuition fee for Indian Institute of Management Bangalore's E-MBA programme is INR 23 lakh. The fee mentioned here is taken from an unofficial source and is the total tuition fee. Hence, is indicative. For a detailed IIM Bangalore E-MBA fee structure, candidates are advised to contact the admission department of the institute. In addition to the course fee, students are also required to pay application fee charges and exam application charges. Hence, the overall cost that the students bear is comparatively higher. Those students finding IIM Bangalore costly can apply for scholarships provided by the college.
Why ROI is Important?
As we all know, MBA is an expensive degree and the ultimate goal is a financially rewarding career. One cannot spend over INR 10,00000 on a degree that cannot ensure a job with satisfactory salary. Choosing an MBA degree has to be an informed decision. The MBA college you choose must fit in your budget and ensure a good start to career. If you are willing to go over budget, the course/college you choose must compensate effectively. The ROI can help you to assess the financial commitment required for the degree. Working professionals need to evaluate the MBA ROI simply to ensure the income loss incurred during the course, is recovered appropriately and in time.
Also read:
- IIM Placements - Highest Salary Package & Top Recruiting Companies
- MBA Placements: Placement Report of Top B-Schools in India
- Average salary package of non-IIM graduates in India: NIRF-MHRD Rankings
- Top Management Institutes in India: NIRF 2024
- International salary packages offered at top Indian B-schools
The fee for Master of Business Administration programs at the Faculty of Management Studies, Delhi is as low as INR 2 lakh for the General category candidates. The reason for the Faculty of Management Studies, Delhi fees being so low is that it is a University of Delhi department and has a highly subsidised fee structure from the UGC (University Grants Commission). Students belonging to the PwD category shall be exempted from the payment of all fees except for the fee of admission and issuing of the identity card. Also, the semester fee for other categories such as Schedule Caste, Schedule Tribe, or Other Backward Classes is subject to revision and is notified to the candidates before the beginning of the academic session.