Why are IIMs rushing into UG courses?

A quiet but dramatic shift is underway in Indian business education.

In June 2026, the Indian Institute of Management Bangalore (IIMB) announced the establishment of a brand-new campus dedicated exclusively to Undergraduate (UG) studies. Located at Jigani 27 kilometres from its historic main campus. Backed by landmark endowment funds from Tata Trusts, the new campus welcomes its inaugural batch for an interdisciplinary B.Sc (Honours) in Economics, Management and Data Science in August 2026. The curriculum integrates economics, data science, management, philosophy, communication and ethics to nurture the next generation of future-ready problem solvers.

This is not an isolated experiment. Demonstrating an innovative enterprise-academic framework IIM Jammu recently launched a four-year, full-time eBBA (Hons.) degree in partnership with global consulting giant Accenture. Combining 60% academic rigour with 40% industry-led experiential learning, the programme grants high-performing students direct entry into an eMBA after their third year.

Meanwhile, IIM Bodh Gaya signed a Memorandum of Understanding (MoU) with IIT Patna to offer a five-year dual degree (B.Tech + MBA), admitting students purely via JEE Advanced ranks with no requirement to take the Common Admission Test (CAT).

While the primary mandate of the IIMs was historically to nurture postgraduate management talent, why are they expanding into undergraduate education? Why are they diversifying admission channels beyond CAT? More importantly, do these developments signal a fundamental paradigm shift sweeping across Indian business education?

65 Years of IIMs: Disruptions in the historical trends

The journey of the IIMs began in 1961 with the establishment of campuses in Calcutta and Ahmedabad. Over six decades, the network expanded to 22 institutes across 21 states, with the flagship two-year MBA selection through CAT-serving as the undisputed gold standard.

The first disruption in this single-track model occurred in 2011, when IIM Indore launched its five-year Integrated Program in Management (IPM). Six other IIMs — Amritsar, Bodh Gaya, Jammu, Ranchi, Rohtak and Sirmaur — subsequently adopted the IPM model via the IPMAT/JIPMAT entrance exams.

IIMs at Lucknow, Mumbai and Sambalpur offer four-year B.S. programmes in AI, Business Analytics, Digital Science for which students are selected on the basis of JEE. For admissions to BMS (Bachelor of Management Studies) programme, IIM Kozhikode uses its own BMS Aptitude Test. The admission to IIMB’s BSc (Honours) is through its own Undergraduate Admission Test (UG-AT). IIM Amritsar accepts SAT scores for international IPM applicants.

Now 11 out of the 22 IIMs (50%) offer UG programmes in management, with 7 of them using IPMAT/JIPMAT, 3 using JEE and one its own entrance test. CAT ceases to be the single entry gate to IIMs.

Last five years trend in registrations to the top gateway examinations

A glance at five-year application trends across India’s top gateway exams reveals stark shifts. JEE Main has continued its relentless upward climb, surpassing a record 16 lakh applicants in 2026. CAT registrations, after peaking in 2024, flattened and then recorded their first drop in three years.

In contrast, registrations for IPMAT and JIPMAT used by seven IIMs and other reputed institutions such as IIFT have grown nearly fourfold over five years, representing the fastest % growth among all management pathways. Not just that. It is turning out to be more competitive also.

What recruiters say about CAT and IPMAT entrants

Meanwhile, corporate recruiter feedback on IPM graduates has emerged. With over 7,000 IPM graduates in the workforce including 2,200 from IIMs most recruiters report that IPM graduates perform on par with or even outpace traditional CAT entrants in early-career roles. Carrying five continuous years of case-based learning, structured problem-solving and data analytics training, IPM toppers are regularly recruited by top-tier consulting firms, tech majors and Global Capability Centers (GCCs) at salary packages matching postgraduate cohorts.

However, some companies in sectors such as elite global consulting, private equity, niche investment banking and core manufacturing remain cautious, preferring candidates with prior full-time corporate experience for specific senior roles.

What lies ahead for CAT?

Does the undergraduate rush signal the decline of CAT?

First-generation IIM directors caution against reading too much into a single year’s dip. CAT-MBA programmes remain heavily oversubscribed, and corporate India still values the CAT credential for lateral hiring and experienced roles.

Rather than obsolescence, CAT is undergoing a structural repositioning.

Many of the top school-leavers now prefer building foundational technical or quantitative expertise such as engineering or data science before adding a management degree later. It aligns with the recruiters’ expectations of analytical skills from MBA graduates. IIMs are stepping in to cater to this demand, offering UG programmes with focus on data analytics and some of them using JEE for selection.

Consequently, future CAT’s applicant pool is likely to lean increasingly toward candidates with prior corporate work experience.

Other MBA Formats

This trend directly aligns with the growth of Executive MBA programmes (PGPX/EPGP), 12-to-24-month formats, tailored for professionals with 3 to 5 years of experience seeking career acceleration or domain transitions.

Since the UGC’s 2020 Open and Distance Learning regulations put online degrees on the same legal footing as regular ones for jobs and further study uptake for online MBAs has grown steadily. Over 110 institutions now hold UGC approval to run these programmes, with an estimated over one lakh enrolments in 2025 and continued double-digit growth expected through 2026. A July 2025 Graduate Management Admission Council survey of recruiters found more than half, particularly in the technology sector, rate online-programme graduates on par with in-person counterparts, provided the candidate has the requisite skills, a positive shift from the scepticism that greeted online MBAs even five years ago.

As per UGC, about 200 universities offer four-year undergraduate honours degree programmes as per NEP-2020. The first batch of students graduated in 2025. The UGC guidelines (July 2026) now allow higher education institutions to offer one-year postgraduate diplomas/degrees in online and distance mode specifically designed for the graduates holding four-year Honours degrees. It is likely that the regulators may shortly extend the permission to offer one year PG programmes in campus mode as well, thereby bridging the regulatory gap, observed in the last 2 years.

IIMB dedicated UG campus: will others follow?

IIM Bangalore’s decision to build a separate satellite campus rather than squeeze undergraduates into its existing 100-acre site reflects its strategic intent. A dedicated campus designed from scratch allows the institute to cultivate rigourous academic and residential environments tailored specifically for school-leavers, rather than mixing cohorts with significant age and experience differentials. It remains to be seen whether other IIMs will replicate this twin-campus model, considering challenges in resource utilisation and logistics.

How global B-schools are handling the same pressure?

India is not alone in rethinking the traditional postgraduate degree, and it is instructive to see how the world’s leading business schools are responding to a related but distinct pressure on the full-time MBA programme. The world’s strongest brands — Harvard, Stanford and Wharton — have preserved the 2-year MBA strictly for professionals with 4+ years of work experience. Several of them offer the liberal arts and run joint-degree tracks combining international studies, engineering or life sciences with management, each conferring two degrees rather than one. They build the broad technology-fluent foundation as early as possible and keep the postgraduate management degree available as a later optional layer.

The AI undercurrent

Underpinning almost every trend in business education is the pervasive impact of Artificial Intelligence (AI). With an estimated 83% skill shortfall in AI-literate management business schools are under intense pressure to integrate technical fluency, programmeming and data analytics much earlier in the learning lifecycle. The new UG-PG formats enable the BSchools to address the challenge by building the MBA product from the ground-up.

Implications for the stakeholders

This shifting landscape holds crucial implications across stakeholders:

Students: For high school students management is no longer a post-graduation afterthought. Students are willing to commit early via IPM or four-year BBA or interdisciplinary BSc tracks, opt for dual tech-management degrees (IIT-IIM) or follow the traditional three-year degree plus CAT route. On completion of the programme, the graduates look forward to similar corporate careers as the CAT-MBA graduates.

Recruiters: Employers must increasingly discard the notion of CAT-MBA as a uniform credential. CAT entrants, IPM graduates, dual-degree holders and online MBA graduates bring distinct skill sets, requiring format-specific recruitment screening.

B-schools: Standalone two-year MBAs can no longer maintain market dominance in isolation. B-schools must expand from upstream MBA into undergraduate education to secure top talent in science, technology, engineering and mathematics (STEM) early so as to groom leaders with analytical thinking and problem-solving skills.

Regulators: Regulators such as the UGC and AICTE must streamline policies to ensure seamless operational integration between four-year undergraduate degrees and one-year master’s programmes.

Way forward

The common message from the new initiatives across the IIMs at Bangalore, Jammu and Bodh Gaya is clear: Indian business education is being fundamentally redefined. The standalone, age-old two-year MBA is no longer, by itself, a sufficient answer to what Indian and global employers are asking for. Innovative formats are evolving to offer alternative pathways to diverse student profiles and groom them to meet their career aspirations. Institutions that adapt to market demand and construct flexible, early-stage pathways will lead the next era of management talent development. Half of the IIMs have already shown the way. Will the rest of the BSchools follow?

(Prof. O.R.S. Rao is the Chancellor of the ICFAI University, Sikkim. Views are personal.)