Indian edtech major BYJU’s on Monday said its test preparation arm Aakash Education Services will launch its initial public offering in the middle of next year.
Blackstone-backed Aakash, which was acquired by BYJU’s for $950 million in 2021, is one of the best-performing companies under the group.
Aakash offers test preparation courses targeting the JEE (Joint Entrance Examination) for engineering and NEET (National Eligibility cum Entrance Test) for medical studies. Aakash has over 325 centres currently serving more than 4,00,000 aspirants across the country.
Since its acquisition, Aakash has reportedly clocked a three-fold increase in revenue in the last two years. The appointment of the merchant bankers for the IPO will be announced soon, the company said.
The announcement comes against the backdrop of several Indian IPO-bound companies either postponing or calling off their plans. Several others also trimmed their target IPO size to more modest levels.
Earlier this year, Indian skincare startup Mamaearth said it is putting its IPO on hold, while SoftBank-backed Indian hotel aggregator OYO Hotels and Homes Pvt Ltd is now reportedly looking to raise $400-600 million, compared with its earlier plans to raise $1.02 billion.
BYJU’s has spent $2.5 billion acquiring smaller firms in the past two years, including Aakash, WhiteHatJr, Great Learning, and Toppr.
“Five of our six businesses are profitable. Only one, White Hat Jr, is yet to make profits but we have reduced the burn,” co-founder Byju Raveendran told DealStreetAsia in an exclusive webinar, adding that “WhiteHat Jr was a mistake”.
Once the poster child of edtech companies in India, BYJU’s has been firefighting a range of issues such as mounting losses, cost pressures, repayment of a $1.2 billion loan, and widespread concerns that it may be significantly overpriced.
In a fresh setback for BYJU’s, lenders have pulled out of negotiations to restructure a $1.2-billion loan, a source familiar with the matter told DealStreetAsia.
Last month, BYJU’s closed $250 million in a fresh funding round from US-based fund manager Davidson Kempner Capital Management and is in talks to close another $750 million soon, a source familiar with the matter had told DealStreetAsia.