Byju’s announces plans to IPO Aakash Education in mid-2024

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Bengaluru-based edtech unicorn Byjus on Monday announced plans to launch the initial public offering (IPO) of its tutoring subsidiary Aakash Educational Services (AESL) in mid-2024. According to an official statement from the company, Byju’s board of directors has officially approved the IPO and it is expected that the appointment of commercial bankers for the IPO will be announced shortly.

Available reports previously said the size of the IPO could be around $1 billion, with Aakash’s valuation going down to $3-4 billion. Discussions for an IPO are currently ongoing, while the company is reportedly facing a June 5 repayment deadline on a $40 million loan. Last week, Bloomberg reported that Byju’s lenders called off talks to restructure a $1.2 billion loan taken out 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 instrument deal, according to people familiar with the matter. The funds were raised against convertible bonds issued by Aakash. Davidson Kempner Capital Management will participate in Aakash’s upcoming market debut. This is part of an ongoing $1 billion funding round that the company is raising in a mix of equity and structured instruments valued at $22 billion. This is to help Byju support AESL’s IPO plans.

Byju’s acquired Aakash in 2021 for $1 billion. “Since the acquisition, Aakash has benefited from numerous synergies with Byju’s that have accelerated its growth – and has seen sales triple in the last two years. Aakash revenue is on track to reach INR 4,000 Crore with EBITDA (Earnings Before Interest Taxes). , depreciation and amortization) of INR 900 crore in fiscal year 2023-24,” the company said in a statement.

“Aakash is uniquely positioned to capitalize on this growth with its comprehensive offering that combines the best of classroom learning with state-of-the-art digital products and services tailored for engineering and medical entrance exams. The forthcoming IPO will provide significant capital infusion to strengthen Aakash’s infrastructure, expand its reach and expand quality exam prep education to a greater number of students across the country,” the statement continued.