Byju’s-owned Aakash Institute is set to witness Ranjan Pai, Chairman of the Manipal Education and Medical Group (MEMG), emerge as its largest shareholder with a 40 percent stake buy, as per an Economic Times report citing sources.
The Aakash board has given the nod to the conversion of the $300 million investment made by Pai in 2023 into equity. This move values the company at around $700 million, making it debt-free – a significant development for Byju Raveendran’s edutech group.
Aakash Institute, Pai and Raveendran did not respond to queries, as per the report.
Think & Learn, the parent company of Byju’s, acquired Aakash Institute for $950 million in 2021, marking one of the largest acquisitions in the Indian internet sector.
Notably, Pai having invested close to $200 million in Aakash Institute in November 2023, played a crucial role in helping Byju’s clear its debt and interest to Davidson Kempner, a United States-based firm.
With the recent developments, Pai, Raveendran, and Think & Learn will collectively hold 80-82 percent of Aakash, while Blackstone and Aakash promoters will retain the remaining 18 percent. Observers told the paper that “Pai is a white knight for Byju’s” amid its ongoing challenges.
Pai is expected to secure additional seats on the board of Aakash Institute after obtaining the antitrust regulator’s approval for his investment. This aligns with his recent pattern of increased investments in new-age firms.
Aakash reported a 40 percent increase in revenue to ₹1,491 crore in FY22, with a profit of close to ₹80 crore. The fate of Blackstone’s and Chaudhry’s stakes, along with Aakash Chaudhry’s potential return as CEO, is yet to be clarified.
Byju’s, facing financial challenges, is reportedly considering a rights issue at a valuation between $500 million to $1 billion. Recent markdowns by investors BlackRock and Prosus indicate a significant drop from its peak valuation of $22 billion three years ago.
Byju’s consolidated loss for FY22 was ₹8,245 crore on operating revenue of ₹5,014 crore. Audited financials for FY23 are pending.