In a strategic move to fortify its position in the competitive edtech landscape, Byju’s-owned Aakash Institute has reportedly secured a new investor. Ranjan Pai, the chairman of Manipal Education and Medical Group, is said to have acquired a 40% stake in the test-prep business, according to a recent report by The Economic Times.
The development comes as the Aakash board greenlights the conversion of a $300 million investment by Pai in 2023 into equity. Following this conversion, Aakash Institute’s valuation is expected to reach approximately $700 million, effectively rendering the company debt-free. This move signifies a significant financial boost for Aakash Institute and underscores the continued growth and strategic partnerships within the edtech sector.
Byju’s, a major player in the edtech space, faced challenges in recent times but made a decisive move in 2021 by acquiring Aakash Institute for a substantial $950 million. This acquisition, part of Byju’s aggressive mergers and acquisitions strategy, marked one of its largest endeavors in the education sector.
Ranjan Pai’s involvement in resolving challenges, particularly the Davidson Kempner debt issue, is seen as crucial for both Aakash Institute and Byju’s. His role in addressing critical matters suggests a positive trajectory for these education-focused companies.
About Byju’s-Owned Aakash Institute:
While the information could not be independently confirmed by Business Today, the potential infusion of fresh investment aligns with Aakash Institute’s recent financial performance. Aakash Institute reported an impressive 82% surge in total profit to Rs 79.5 crore for the fiscal year 2022, with operating revenue growing by 45% to Rs 1,421 crore. These financial indicators showcase the company’s resilience and effectiveness in navigating the evolving educational landscape.
Aakash Institute derives a substantial 88% of its operating revenue, amounting to Rs 1,282.3 crore, from coaching fees. Additionally, revenue from the franchise segment of its business reached approximately Rs 139 crore. The company’s commitment to quality education is evident in its offerings, catering to medical and engineering school entrance tests such as NEET and IIT-JEE, along with classes for Olympiad, NTSE, and basic classroom curriculum.
Analyzing the expenditure structure, Aakash Institute reported a notable 35% increase in employee-related expenses, representing its highest cost category at Rs 722.8 crore. This expense, constituting around 54% of the total expenses, rose by 34% to Rs 1,331.8 crore. These figures underscore the company’s dedication to investing in its human capital, ensuring the delivery of high-quality educational services.
In conclusion, Aakash Institute’s latest developments, including Ranjan Pai’s investment and positive financial results, position the company on a trajectory of growth and innovation within the edtech sector. The strategic moves by Byju’s and the infusion of fresh capital highlight the resilience and adaptability of educational institutions in the evolving landscape of digital learning.