Aakash—subsidiary of edtech major Byju’s is planning to raise USD 250 million in a pre-IPO round through convertible notes. According to the media reports, the convertible notes will have a discount of 20 per cent on the listing price for incoming investors.
Byjus acquired Aakash in 2021 in a cash and stock deal worth USD 950 million, which also gave a large cash exit to Aakash’s key investor Blackstone.
According to the reports, the IPO will definitely happen this year in the Indian market and the company has already consulted with bankers. Byju’s management, however, hasn’t decided on a timeline yet since the process involves filing Draft Red Herring Prospectus (DRHPs) and completing other compliances.
The acquisition of Aakash by Byju’s is one of the biggest deals in India’s edtech market, but has also been in the news for delayed payments to some key investors. At the time of the acquisition in April 2021, Byju’s had said Aakash would continue to function independently although Aakash’s founders and Blackstone Group were allocated cash and stock exits.
Though Byju’s cleared payments that were due to Aakash’s founder in July last year, the payment to Blackstone was deferred based on a mutual agreement. Aakash’s founder and Blackstone continue to hold a minority stake in the firm. By September 2022, the remainder of USD 250 million owed to Blackstone was also settled, more than a year after the announcement of the acquisition.
Byju’s was in news in 2022, marked by a series of layoffs and a controversy surrounding the late filing of its FY21 results. After a delay of nearly 18 months, Byju’s filed its FY21 results in September 2022, reporting its net loss rising up to INR 4,588 crore from INR 231.69 crore in FY20. The company’s total revenues during the year saw a marginal decline of 3.32 per cent to INR 2,428.39 crore.
The huge jump in losses during the year was due to the deferral of 40 per cent of revenues to subsequent years, but costs not getting deferred. Founder Byju Raveendran had then said losses would reduce in FY22. For FY22, he had then said the company had registered nearly INR 10,000 crore in gross revenues. The company is yet to file its FY22 results with the ministry of corporate affairs.
In October last year, Byju’s laid off around 2,500 employees — 5 per cent of its 50,000-strong workforce — across various subsidiaries.
