BYJU'S announces Aakash IPO in 2024: Everything to know
BYJU'S, India's most valuable start-up, has announced that it will launch the initial public offering (IPO) of its exam preparatory division Aakash Educational Services Limited by mid-2024. The Bengaluru-based company is planning to raise $800 million to $1 billion for the tutor chain at a valuation of more than $3.5 billion. The continued growth of the test-prep market will be key to Aakash's success.
A look at BYJU'S and Aakash's partnership
Back in 2021, BYJU'S took over Aakash for roughly $950 million (approximately Rs. 7,100 crore). Since then, the latter's profits have gone up significantly. In the fiscal year 2023-24, Aakash will clock a revenue of Rs. 4,000 crore, of which the operational profit will stand at around Rs. 900 crore. As of now, it runs 325 centers across India, coaching over four lakh students.
Why is BYJU'S optimistic about Aakash's prospects?
As per a market researcher named Ken Research, revenues from the exam preparation market are going up at a compound annual growth rate (CAGR) of 9.3% over 2020-25. This growth has received a shot in the arm from the online test preparation category, which is growing at a CAGR of 42.3% over the same time duration.
The IPO listing has been approved by BYJU'S board
Aakash's IPO launch has been given a green signal by BYJU'S board and the names of merchant bankers to carry forward the listing procedure will be announced soon. BYJU'S is apprehensive about Aakash's consumer awareness in the global markets but IPO listing should remove worries.
'IPO will strengthen Aakash's infrastructure'
"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 students across the nation," BYJU'S said in a statement announcing the IPO move. "Aakash's comprehensive range of offerings combines the best of classroom-based learning with cutting-edge digital products and services tailored for engineering and medical entrance exams," it added.
Tensions for BYJU'S continue to mount
The IPO announcement for Aakash comes at a time when BYJU'S creditors have decided to leave negotiations to restructure a $1.2 billion loan. Its investors have accused it of hiding $500 million by transferring it out of the firm. BYJU'S is also facing regulatory scrutiny.
