What is MBA Return on Investment (ROI)?

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Senior Manager - Content

Updated on Oct 23, 2024 16:18 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.

What is MBA ROI? It is important for every management aspirant to know MBA ROI, so that they can choose the right college 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 Rs 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.

Q: Is FMS Delhi hard to get?

As the Faculty of Management Studies, Delhi is regarded as one of the best Business schools in the country, the number of applicants remains high. Even if not all Common Admission Test toppers aim to study at the Faculty of Management Studies Delhi, nobody likes to drop their chances. The shortlisting cut-offs remain high because most of the 95 plus Common Admission Test scorers apply for the Faculty of Management Studies, Delhi Master of Business Administration programme.

Q: How is the post-MBA life for MBA graduates from top MBA institutions like FMS, XLRI, MDI, IIM Mumbai, SP Jain, and JBIMS?

The rewards of life post-MBA can be substantial for graduates from renowned institutions such as FMS, XLRI, MDI, IIM Mumbai, SP Jain, and JBIMS. With their impressive qualifications, graduates from these top-notch B-schools are highly coveted by prestigious companies in diverse industries and can expect lucrative job offers from some of the leading recruiters in the market. Compared to the past, the job prospects for business school alumni are much more promising, with MBA degree holders having ample opportunities to explore various career paths. Based on their strengths and interests, MBA graduates can find themselves working in strategy, product management, business development, finance, operations, or human resources, among other fields.

Q: Is MDI Gurgaon Executive MBA good?

Yes, Management Development Institute is good for its Executive PGDM courses. MDI offers several Executive PGDM courses including PGDM-BM, PGDM-BA and PGDM-PPM. The course duration of all these varies from 18 months to two years. MDI Gurgaon PGDM-BM programme is accredited by AMBA, the Association of MBAs (UK). Admission to these courses is granted based on merit in accepted exams.

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.

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.

Q: Is CAT necessary for Executive MBA from IIM Shillong?

IIM Shillong offers a one-year residential Executive Master of Business Administration (E-MBA) programme called the Post Graduate Programme for Executives (PGPEx). The admission-related details of the programme are given in the table below:

Feature	Details
Eligibility	Bachelor’s degree or equivalent from a recognised institution
Admission Criteria	Entrance Exam* score, Group Discussion and/or Personal Interview
Accepted Entrance Exams*	CAT (overall 50 percentile)/ GMAT (overall 500 score)
Additional Qualification	-Full-time work experience of 5 years (as of March 31, 2022) -Relaxation up to 1 year for candidates with at least 1-year field experience outside India
Total Fee	INR 20 lakh

Q: Is it worth doing Executive MBA from IIM Kozhikode?

IIM Kozhikode offers a two-year Executive Post Graduate Programme in Executive Management (EPGP), which is also popular as E-MBA. Candidates with some experience can gain a lot of benefits by pursuing MBA from IIM Kozhikode. It is one of the top Management institutes of the country. Along with the experienced faculty, candidates also get great exposure by studying in an IIM. For the Management category courses, IIM Kozhikode has been ranked on number 3 under the top 100 colleges of Managemen in India by NIRF. At the completion of the course, candidates will receive a degee of MBA from reputed IIM Kozhikode. The institute has received Global recognition from AMBA, EQUIS and Business Incubator and Entrepreneurship Centre support through IIMK LIVE.

Factors affecting MBA ROI

There are some factors that may affect MBA ROI. 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.

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.