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Bengaluru-based edtech unicorn Byjus on Monday has revealed the plans to launch the initial public offering (IPO) of its tutoring subsidiary Aakash Educational Services (AESL) in mid-2024. According to an official statement released by the company, Byju’s board has officially approved the IPO and it is expected to announce the appointment of merchant bankers for the IPO shortly.
As per available reports, earlier it was said that the size of the IPO could range around $1 billion with Aakash’s valuation falling to between $3-$4 billion. Currently, the discussions for IPO came amid the company reportedly facing a $40 million loan repayment deadline, June 5. Last week, Bloomberg reported that Byju’s lenders called off discussions to restructure a $1.2 billion loan raised by the company in November 2021.
Meanwhile, Byju’s has raised $250 million from Davidson Kempner Capital Management, a US-based investment firm, in a structured instruments deal, according to people familiar with the matter. The funds have been raised against convertible notes issued by Aakash. Davidson Kempner Capital Management will get a stake in the upcoming market debut of Aakash. This is part of an ongoing $1-billion funding round the firm is raising in a mix of equity and structured instruments at a valuation of $22 billion, which is expected to help Byju’s support the IPO plans of AESL.
Byju’s acquired Aakash in 2021 for $1 billion. “Since acquisition, Aakash has benefited from multiple synergies with Byju’s that have accelerated its growth — clocking a three-fold increase in revenue in the last two years. Aakash’s revenue is on track to reach INR 4,000 crore with an EBITDA (earnings before interest taxes, depreciation and amortisation) of INR 900 crore in the fiscal year 2023-24,” the company said in a statement.
“Aakash is uniquely positioned to capitalise 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 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 statement added.