BYJU’s upcoming IPO values its tutoring business at up to $4 billion

According to people familiar with the situation, BYJU’s, one of India’s biggest online education providers is completing plans for a $1 billion IPO of its tutoring division, Aakash Educational Services.

At least four foreign banks, including JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley as well as Indian banks Kotak Mahindra Bank Ltd. and Axis Bank Ltd. are in discussions with the company. One of the people stated that it is looking for arrangers for the listing.

According to the source, the asset might be worth between $3.5 billion and $4 billion.

A Draft Red Herring Prospectus is required to start the IPO process in India. It is expected to be submitted in January or February. BYJU’s might choose the lead bank within two weeks. According to them, BYJU’S hopes the IPO will happen in late August or early September.

The three-decade-old Aakash was purchased by Byju’s for roughly $950 million last year. Aakash operates physical centers to assist teens in getting ready for competitive exams. Those exams rank them for admission to prestigious colleges like the Indian Institute of Technology.

The leader in traditional test preparation has more than 200 locations around the nation and has expanded its digital test preparation options.


BYJU’S declined to respond 

BYJU’S representative declined to respond. Requests for comment from JPMorgan, Citigroup, Goldman Sachs, Morgan Stanley, Kotak, and Axis representatives were not immediately answered.

Citigroup assisted Aakash in preparing for a stock market debut in India a few years ago. However, the plans were abandoned, and Blackstone Inc. was brought on as a partner in their place. TechCrunch first reported on the meetings with lenders.

Aakash’s operating margin is at 20%, and its yearly revenue is expected to treble in the current year ending in March 2023. Aakash stands out among the recent IPOs in India due to its solid financials. In contrast, high-profile but unsuccessful internet businesses like Paytm, Zomato Ltd., and Policybazaar have struggled since their debuts.

According to one of the sources, BYJU’S has put off discussions about listing on its stock market because the global economy isn’t encouraging new technological breakthroughs. 

Although BYJU’S had been in talks with several particular purpose acquisition entities for a listing, such plans have been put on hold because of the global economic downturn and falling tech stocks.

Even though the higher-education platform Great Learning is substantially smaller in size, one of the sources stated that a successful Aakash offering could also inspire BYJU’S to conduct IPOs for other recent acquisitions.