Byju’s To List Subsidiary Aakash Next Year In India For $1-Billion: Report

The initial offering size could be in the range of a billion dollars, valuing Aakash at $3.5-$4 billion. It expects to file papers with the market regulator in January 2023, according to the report

Byju's is planning to list Aakash Aakash Educational Services, company’s wholly-owned subsidiary, in the first half of the next financial year (FY24) (by June 2024), citing sources privy to the development, Moneycontrol reported on Thursday. 

“Aakash is profitable and is a strong brand that is better understood in India. Investors were of the view that it should be listed here,” one of the sources told Moneycontrol, while adding that Byju’s still has ambitions of a US listing, though it might happen well after Aakash’s listing.

The report said that the initial offering (IPO) size could be in the range of a billion dollars, valuing Aakash at $3.5-$4 billion. It expects to file papers with the market regulator in January next year.

Byju’s had previously reported a 20x jump in its FY21 loss to Rs 4,589 crore on a revenue of Rs 2,428 crore. The move to sell a part in Aakash to the public comes at a time when Byju's has delayed its own IPO amid uncertain macroeconomic conditions that led to public shareholders dumping shares of loss-making companies, the report said.

Started in 1988, Aakash is one of the leading coaching institutes in India. It offers JEE and NEET preparation, among others. Byju’s acquired Aakash, an offline coaching chain, in April 2021 for a cash and stock deal of almost $950 million. It was one of the biggest acquisitions in the Indian education space. Subsequently, the company then deferred part of its payment for Aakash to September 23, 2022.

It was reported that while closing the deal Byju’s paid all of Aakash’s shareholders, except Blackstone. The private-equity firm agreed to deferred payment. The company eventually managed to pay 19 billion rupees ($234 million) to Blackstone Inc, settling its dues.

Earlier it was reported that Aakash Educational Services will provide an unsecured loan of Rs 300 crore ($36.45 million) to Think & Learn Pvt, the company that operates Byju’s, for its “principal business activities.”

A Byju’s spokesperson has said then that the loan from Aakash Educational Services is in effect an advance against the marketing activities and campaigns that Byju’s has been running for Aakash. “In this case, the principal business activity is marketing for the core business of Byju’s Aakash on which the group has already spent and is now being reimbursed,” the spokesperson said.

Since the acquisition, Aakash has grown more than 100 per cent, the spokesperson added.