Bengaluru-based ed-tech major BYJU’S is preparing to launch an initial public offering (IPO) of its entrance coaching preparatory arm — Aakash Education Services Ltd — by the mid of 2024, the company said on Monday.
“BYJU’S … will launch the IPO of its subsidiary, Aakash Education Services Limited (AESL) mid next year,” BYJU’S stated.
BYJU’S Board has approved the IPO.
“The appointment of the merchant bankers for the IPO will be announced soon to ensure a planned and successful listing next year,” the company said.
Coincidentally, the announcement comes on a day when the company had to pay back an installment of $40 million of its highest unrated loan of $1.2 billion.
On the failure to repay quarterly interest payments, it will default. Default risk impacts creditworthiness.
Ed-tech major Byju’s, backed by marquee investors like Sequoia Capital, Lightspeed, Silver Lake, CPPIB, Tencent, and Naspers, last raised $250 million debt in May from US-based Davidson Kempner Capital Management.
BYJU’S purchased Aakash Education in a cash and stock deal of about $950 million (Rs 7,100 crore) in April 2021. Post-acquisition, Aakash saw a three-fold jump in their revenue.
The proceeds from the IPO aim to strengthen Aakash’s infrastructure, expand its reach, and make high-quality test-prep education accessible to more students across the country.
“Aakash is uniquely positioned to capitalize on this growth due to its comprehensive range of offerings that combine the best of classroom-based learning with cutting-edge digital products and services tailored for engineering and medical entrance exams,” the statement further read.
BYJU’s said Aakash Education’s revenue could touch Rs 4,000 crore with an EBITDA (operational profit) of Rs 900 crore in this fiscal 24.
Aakash runs over 325 centers at present, with over 4,00,000 students across the country.
“We have made several overseas acquisitions (investing an amount of Rs 9,000 crore) over the years as part of our growth strategy,” BYJU’s Founder and CEO Byju Raveendran said.
“I also want to highlight that BYJU’S has brought more FDI to India than any other Indian startup (Rs 28,000 crore), and as a result, we have been able to create job opportunities for more than 55,000 talented professionals. This makes us India’s largest employer among startups,” Raveendran stated.