NEW DELHI: Edtech company Byju’s, which acquired tuition chain Aakash Educational Services for about $950 million deal in April 2021, will launch an initial public offering (IPO) of Aakash in mid-2024.
Last month, this newspaper reported that the company is in discussion with a few bankers to go ahead with the listing of its subsidiary.
The board of the edtech company has granted its official sanction for this IPO. “The appointment of the merchant bankers for the public issue will be announced soon to ensure a planned and successful listing next year. The upcoming 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,” the company said in a statement on Monday.
Since its acquisition, Aakash has clocked a three-fold increase in revenue in the past two years. Also, Aakash’s revenue is on track to reach Rs 4,000 crore with an EBITDA of Rs 900 crore in FY24. As per Ken Research, test-prep market revenues are predicted to grow at a CAGR (compound annual growth rate) of 9.3% over 2020-2025, led by the online test preparation segment that is predicted to grow at a CAGR of 42.3% over the same duration.
Aakash is one of the largest test prep companies for engineering and medical entrance exams, with over 325 centres currently serving over 400,000 students across the country. Last year, Byju’s had taken an unsecured loan of Rs 300 crore from Aakash. The unsecured loan was granted to the edtech giant at 7.50% interest rate.
Byju’s in a statement had said, “The Rs 300 crore loan from Aakash Educational Services Limited is in effect an advance against the marketing activities and campaigns that Byju’s has been running for Aakash.” The company is yet to file its FY22 results with the Ministry of Corporate Affairs (MCA).
Byju’s is backed by investors including Chan-Zuckerberg Initiative, Naspers, CPPIB, General Atlantic, Tencent, Sequoia Capital, Sofina, Verlinvest, IFC, Aarin Capital, Lightspeed ventures and Tiger Global, among others. In FY21, the company reported consolidated loss of Rs 4,589 crore and the group’s revenue in FY21 stood at Rs 2,428 crore.