Byju’s to launch Aakash’s IPO in 12 months

Byju’s on Monday announced that it will launch the Initial Public Offering (IPO) of its subsidiary, Aakash Education Services Limited (AESL), mid next year. The announcement has come as the Bengaluru-based edtech major is dealing with loan default and alleged violations of the foreign exchange policies.

The IPO will mark a milestone in the continued growth and expansion of Aakash + Byju’s, creating a comprehensive portfolio of products that caters to a broader range of students, the company said in a statement.

The board of Byju’s has granted its official sanction for this pivotal undertaking and the appointment of the merchant bankers for the IPO will be announced soon to ensure a planned and successful listing next year, the company added.

In April 2021, Byju's shelled out nearly $1 billion to acquire Aakash.

According to the company, the IPO will provide a significant capital infusion to bolster Aakash's infrastructure, broaden its reach, and extend high-quality test-prep education to a larger number of students across the nation.

Byju’s also said that AESL’s revenue is on track to reach Rs 4,000 crore with an EBITDA of Rs 900 crore in the fiscal year 2023-24. While Aakash is yet to file its annual financial report for the past two fiscal years, the firm claimed to clock over Rs 1,250 crore in revenue in the fiscal year ending March 2022.

Aakash Institute is a competitive exam preparation platform that offers NEET, IIT-JEE main and advanced, Olympiad NTSE, classroom courses along with distance learning, and several scholarship programs. With over 325 centers, the platform currently serves over 400,000 students, who are preparing for engineering and medical entrance exams.

Byju’s has been in the spotlight since the beginning of this year for a variety of issues, whether it is debt funding,  mass firings, or raids conducted by Enforcement Directorate (ED).

After laying off over 1,000 employees in February, the firm recently raised $250 million via structured credit transaction from US-based alternative investment firm Davidson Kempner Capital Management. Meanwhile, ED conducted search operations at three premises of Byju Raveendran and his company, Think & Learn Private Limited (Byju’s). However, Byju’s claimed that the recent visit by ED officials was related to a routine inquiry under FEMA (Foreign Exchange Management Act).

Coming back to the company’s financial health, Byju’s scale grew mere 4% to Rs 2,280 crore in FY21 from Rs 2,189 crore in the previous fiscal year (FY20). The company, which is yet to file its FY22 numbers, claimed that it registered nearly Rs 10,000 crore in gross revenues in the fiscal year ended in March 2022.