ET had reported on May 13 that Byju’s had closed a Rs 2,000-crore round from Davidson Kempner Capital in a structured credit transaction against the cash flows of Aakash Educational Services, linked to the test prep arm’s future public listing.
The announcement on the IPO for Aakash, which Byju’s acquired in 2021 for $950 million, has come amid the company reportedly facing a $40 million loan repayment deadline. Further, according to a Bloomberg report last week, Byju’s lenders pulled out of discussions to restructure a $1.2 billion loan raised by the company in November 2021.
“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 Rs 4,000 crore with an EBITDA (earnings before interest taxes, depreciation and amortisation) of Rs 900 crore in the fiscal year 2023-24,” the company said.
Citing Ken Research, the company added that test-prep market revenues are predicted to grow at a compound annual growth rate (CAGR) of 9.3% over the 2020-2025 period, led by the online test preparation segment, which is predicted to grow at a CAGR of 42.3% over the same duration.
“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,” it added.
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“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 in its statement.The Bengaluru-based company, which has been backed by marquee investors such as Tiger Global, Sequoia Capital and General Atlantic, has also recently seen its valuation being written down by key investors such as BlackRock and Invesco. The company had last raised funds at a valuation of $22 billion.
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