Byju’s has revealed that it intends to sell its educational institute, Aakash Education Services, through an initial public offering (IPO). This was the company’s most expensive acquisition to date, and it also happens to be the major source of revenue for the troubled tech major, which was recently in the news due to a valuation cut that was implemented by BlackRock, one of its investors. According to the press statement that was issued to announce the intentions for the IPO, Aakash has seen a revenue gain that is three times more than it was only two years ago. According to a statement that was made public, it is proceeding as planned to achieve Rs. 4,000 crore with an EBITDA of Rs. 900 crore in FY24.
When the whole edtech engine of Byju’s began slowing down due to a declining epidemic, a flurry of aggressive and costly offshore acquisitions, and the coding mania driven by WhiteHat Jr losing momentum, the IPO rumors of Aakash gained pace. Mrinal Mohit, the chief executive officer of Byju’s in India, stated in April of this year that the tech giant is gearing up to list Aakash.Â
The changes in both the macro and the microenvironments that occurred over the course of the last year were discussed by the company’s CEO, who also happens to be one of the six original founding members of Byju’s. He emphasized that Aakash is lucrative and that it is a company that the average person in the nation, as well as retail investors, can readily comprehend and connect to.
The Aakash tale has been one of resilience and financial success. The operational revenue went from 327.7 crores in the previous fiscal year to being 1,214.1 crore in the following fiscal year. After suffering a little setback in FY21 as a direct result of the pandemic’s impact on Aakash’s offline operations, the company was able to climb back up to 1,250 crore in FY22 and more than 3,000 crore in FY23.
We have heard from analysts, people who follow the sector, and donors about why Aakash makes more sense. First, the revival of traditional forms of education after the pandemic has dulled the luster of online instruction, which was the only kind of education available while the Covid wave was at its height.
The United States-based asset management BlackRock, which holds a stake in Byju’s worth less than one percent, cut the value by over 50 percent to $11.5 billion in April, and then further reduced it at the end of May to an estimated valuation of $8.4 billion. At the conclusion of the September quarter of the previous year, the technology investor Prosus, which is located in the Netherlands, estimated that its 9.67 percent ownership in Byju’s was worth $578 million.
Byju’s was able to successfully complete the acquisition of AESL and pay the whole purchase price of around $950 million, which is approximately equivalent to 7,100 crores, in the month of April 2021. As a direct result of the successful completion of the purchase, Aakash has seen a significant increase in the total amount of money it has brought in over the course of the last two years. Its revenue climbed by a factor of three, which is a significant boost in comparison to its previous numbers.
According to certain positive forecasts for the not-too-distant future, the expansion of the test-preparation industry is anticipated to bring in a greater amount of money. According to the results of Ken Research, it is anticipated that the revenue created by the market for test preparation would expand at a compound annual growth rate (CAGR) of 9.3 percent between the years 2020 and 2025. This projection is based on the expectation that the number of people taking standardized tests will continue to rise.
