Think & Learn Pvt, the company that runs Byju’s, the world’s most valuable edtech company, will borrow Rs 300 crore ($36.45 million) from its wholly owned subsidiary Aakash Educational Services for its “main business activities.”
“Think & Learn is in need of financing for its primary business operations,” Aakash Educational Services stated in its most recent filing with the Ministry of Corporate Affairs. “The company’s board of directors, in their meeting on October 3, subject to approval of members in general meeting, has given its consent for issuing an unsecured loan to Think & Learn for a sum not exceeding Rs 300 crore.”
According to the application, the loan was issued at a 7.50 percent annual interest rate.
Byju’s purchased Aakash in April 2021 for about $950 million in cash and equity, making it one of the largest purchases in the Indian education market. The corporation therefore postponed part of its payment for Aakash until September 23, 2022, and was eventually able to pay the money to Aakash stockholders.
“The Rs 300 crore loan from Aakash Educational Services is effectively an advance on the marketing efforts and campaigns that Byju’s has been running for Aakash,” stated a Byju’s spokeswoman. “In order to capitalise on economies of scale, Byju’s purchases media spots in bulk for all of its group companies.”
“Byju’s Aakash has expanded more than 100 percent since the acquisition,” the spokeswoman said, adding that a subsidiary and the parent firm can only lend or receive loans for core business activities. “In this situation, the primary business activity is marketing for Byju’s Aakash’s core business, on which the group has previously spent and is now being compensated,” the spokeswoman explained.
According to the spokeswoman, Byju’s has approximately Rs 9,800 crore in its bank as of October 27, and the company is not cash-strapped. Aakash refused to remark on the situation.
