What is MBA Return on Investment (ROI)?

What is MBA Return on Investment (ROI)?

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Vipra
Vipra Shrivastava
Senior Manager - Content
Updated on Jun 20, 2025 18:04 IST

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.

MBA 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:

Table of content
  • 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. 

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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. 

Q:   Is studying at IIM Ahmedabad expensive?
A:
The total course fee for PGP offered at IIM Ahmedabad is INR 23 Lacs. IIM A charges INR 18 Lacs as its course fees. This includes academic support, tuition, accommodation, basic healthcare, medical insurance and alumni association membership fee. This will also include books, case study materials, etc. This fee does not include mess fees, laptop, travel or personal expenses etc. Other expenses (academic) and living (including recreation) in Ahmedabad for 2 years costs another INR 2 Lacs.
Q:   Why is FMS Delhi so cheap?
A:

The cost of the two-year MBA programme at FMS Delhi is much less than that of other prestigious Indian B-schools like IIMs and XLRI, with a total tuition price of INR 2 lakhs. Two important aspects contribute to the decreased fees. First off, FMS is a division of the publicly funded University of Delhi and receives government grants to help keep tuition affordable. Second, FMS gains from a strong alumni network that gives the school financial support and helps fund infrastructure upgrades like new classrooms and libraries. The data is collated from the web and can be indicative. For more information visit the official website.

Q:   What is the hostel fees at IIM, Shillong?
A:

The hostel fee at IIM Shillong varies depending on the type of room you choose and the occupancy. The following are the hostel fees for the academic year 2023-2024:

Type of roomOccupancyFees (INR)
Deluxe singleSingle1,50,000
Deluxe doubleDouble1,20,000
Deluxe tripleTriple90,000
Deluxe familyFamily (5 people)3,00,000
Standard singleSingle1,25,000
Standard doubleDouble1,05,000
Standard tripleTriple80,000
Standard familyFamily (5 people)2,75,000

The hostel fees include the following:

  • Accommodation: A well-furnished room with attached bathroom, bed, study table, chair, cupboard, and fan.
  • Mess: Three meals a day (breakfast, lunch, and dinner) prepared by a professional chef.
  • Laundry: Free laundry service for one set of clothes per day.
  • Housekeeping: Daily housekeeping services including cleaning of the room, bathroom, and common areas.
  • Security: 24x7 security with CCTV cameras.
  • Recreation: Access to the gym, swimming pool, and sports facilities.
  • Medical: Access to the medical clinic on campus.

The hostel fees are payable in advance for the entire academic year. The university also charges a one-time security deposit of INR 5,000 for each student.

If you are interested in applying for hostel accommodation at IIM Shillong, you must fill out the hostel application form and submit it along with the required documents. The application form can be downloaded from the university website.

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*

IIM Ahmedabad

INR 25.00 lakh

INR 1.46 CPA

INR 34.45 LPA

IIM Bangalore

INR 24.50 lakh

NA

INR 35.92 LPA

IIM Calcutta

INR 27.00 lakh

1.20 CPA

INR 35.07 LPA

IIM Kozhikode

NR 20.50 lakh

INR 72.02 LPA

INR 29.20 LPA

IIM Lucknow

INR 20.70 lakh

INR 65.00 LPA

INR 30.00 LPA

IIM Indore

INR 21.17 lakh

INR 1.00 CPA

INR 25.68 LPA

FMS, Delhi

INR 2.00 lakh

INR 1.23 CPA

INR 34.10 LPA

MDI, Gurgaon

INR 26.00 lakh

INR 63.30 LPA

INR 24.20 LPA

IIFT, Delhi

INR 21.52 lakh

INR 85.40 LPA (international)

INR 76.50 LPA (domestic)

INR 29.10 LPA

XLRI, Jamshedpur

INR 28.00 lakh

INR 75.00 LPA

INR 29.89 LPA

SPJIMR, Mumbai

INR 21.00 lakh

INR 81.00 LPA

INR 33.00 LPA

NMIMS, Mumbai

INR 25.00 lakh

INR 67.70 LPA

INR 25.30 LPA

JBIMS, Mumbai

INR 6.10 lakh

INR 87.12 LPA

INR 26.12 LPA

IIM Shillong

INR 17.50 lakh

INR 71.50 LPA

INR 26.10 LPA

IIM Trichy

INR 19.50 lakh

INR 43.69 LPA

INR 19.43 LPA

IIM Rohtak

INR 17.90 lakh

INR 48.25 LPA

INR 19.27 LPA

IIM Ranchi

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. 

Q:   What is the current fees of MMS course in JBIMS college?
A:

The total tuition fee of MMS is INR 6 lakh - INR 7 lakh. For more details on the fee structure and numerous refundable and non-refundable components of the same, students are advised to refer to the official website of JBIMS or visit the admission office for details. In addition to the institute-level fee, the MAH CET application fee is to be paid online during registration for the same. Fee payment through any other mode is not accepted. The below table indicates the category-wise MAH CET application fee:

Category

MAH MBA CET 2024 Fees

For Open Category Candidates from Maharashtra State, Outside Maharashtra State (OMS), J & K Migrant candidates

INR 1,000

For Candidates of Backward Class Categories [SC, ST, VJ/DT- NT(A), NT(B), NT(C), NT(D), OBC, SBC, SEBC] and Persons with Disability Candidates belonging to Maharashtra State only

INR 800

Q:   What is the MBA fee of IIM Ahmedabad?
A:

As per the details collated from unofficial sources, the total tuition fee for the PGP and PGP FABM course for the 2024-26 batch is INR 18.3 Lacs (inclusive of all taxes). However, the aforementioned fee is only indicative considering it is sourced from unofficial sources. However, as per the official website, the over MBA programme fee is inclusive of tuition fee, course materials fee, student’s stay and food during campus visits and other service facilities, such as library, etc. Students can also pay this programme fee in installments. The institute shares the fee structure along with the admission offer. For the ease of the students, IIM-A also has tie-ups with multiple banks to offer collateral-free education loans.

Q:   What is the hostel fee of IIM Bangalore?
A:

IIM Bangalore Hostel fees are INR 80,000 for a single student and INR 3.76 lakh for family accommodation. IIM Bangalore students are provided with accommodation on campus in a well-appointed single room in the hostels. IIM-B has 16 hostel blocks, one executive block, and executive accommodation at the Management Development Centre, popularly known as MDC. Twenty-four-hour Internet connectivity, fully automatic washing machines, a hair salon, a music room, a student-run library, a recreation room, and a store on the hostel premises are standard features. Laundry and ironing services, an intercom facility, and a guest room facility for visitors are also provided.

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.  

About the Author
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Vipra Shrivastava
Senior Manager - Content

Vipra is a massive Breaking Bad fan. When not watching crime drama series, she spends time in updating the list of places she wants to visit and people she wants to meet, but she is happiest in the company of dogs. ... Read Full Bio