Byju's to list Aakash Institute by mid-2024

Edtech major Byju's will launch the initial public offering of Aakash Education Services Limited (ASEL) by mid-2024, the company said in a statement on Monday.

The Bengaluru-headquartered edtech unicorn acquired Aakash Institute in April 2021, for a cash and stock deal worth ₹1,983 crore. Known for NEET and IIT test preparations, Aakash has over 325 centres and currently serves more than 4 lakh students, according to the company. Last year, the company took a loan worth ₹300 crore for Aakash Institute citing that the amount is for marketing activities and campaigns for Aakash Institute.

"The Board of Byju’s has granted its official sanction for this pivotal undertaking. The appointment of the merchant bankers for the IPO 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," Byju's said.

"Since the acquisition, Aakash has benefitted from multiple synergies with BYJU’S that have accelerated its growth - clocking a three-fold increase in revenue in the last two years. AESL's revenue is on track to reach ₹4,000 crore with an EBITDA of ₹900 crore in the fiscal year 2023-24," it added.

The development comes at a time when Byju's deadline to pay a quarterly interest payment of $40 million of $1.2 billion to the creditors expires today, according to Bloomberg.

Notably, the edtech giant has been undergoing financial constraints over the past several months. From valuation cuts to scrutiny by India's enforcement directorate, Byju's has made headlines lately for all the wrong reasons.

As the edtech unicorn, which was once valued at $22 billion, grapples to fulfil its financial commitments and woo investors, US-based asset management firm BlackRock Inc, last week marked down Byju’s valuation by 62% to $8.4 billion. BlackRock owns less than 1% of the edtech firm and has pegged the value of its 2,279 shares in Byju’s at over $4.04 million, effectively estimating the company's fair value at $8.4 billion as of FY23. The US investor had earlier slashed the valuation of the edtech major from $4,600 per share in April 2022 to $2,400 a share as of December-end 2022. BlackRock, which manages over $10 trillion in assets, had first entered Byju's roster of marquee investors at a $12-billion valuation in 2020. However, the valuation is much more 'respectable' than what Naspers-owned Prosus had valued the Bengaluru-based startup last year. The South Africa-based new-age tech focussed investor had pegged the fair value of its 9.67% stake in the edtech's parent, Think & Learn, at $578 million at the end of September quarter last year, valuing the company at $6 billion. Though the narrative spun around the markdown was that it was just an accounting treatment, valuing a unicorn's stake at its fair value is indicative of the mounting challenges for the company since its last fundraising of $250 million in October 2022.

Meanwhile, the edtech decacorn is also witnessing heavy scrutiny by the Enforcement Directorate (ED) under the provisions of the Foreign Exchange Management Act (FEMA). Last month, ED conducted searches at the company’s 3 premises in Bengaluru under the provisions of FEMA. However, the edtech company said the recent visit by officials from the Enforcement Directorate was related to a 'routine inquiry' under FEMA.

"We have been completely transparent with the authorities and have provided them with all the information they have requested. We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics. We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner," a Byju's spokesperson told Fortune India.