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BYJU’S obtains Rs 300 crores loan from Aakash Educational Services


The most valuable startup in India, BYJU’S, has obtained an unsecured loan from its wholly-owned subsidiary Aakash Educational Services for “main business activities” in the amount of Rs 300 crore ($36.45 million).

“Funds are needed by Think & Learn for its main business operations. Therefore, in response to a request from Think & Learn, the company’s Board of Directors approved, subject to approval by shareholders in the general meeting, the granting of an unsecured loan to Think & Learn for a sum not to exceed Rs 300 crore, according to Aakash’s official filings. The loan was given at an interest rate of 7.50% annually, according to the papers, the newspaper said.

“In actuality, the loan of Rs 300 crore from Aakash Educational Services Limited is an advance against the marketing initiatives and campaigns that BYJU’S has been doing for Aakash. For all of its group enterprises, BYJU’S purchases media spots in bulk to take advantage of economies of scale. This tactic has produced excellent outcomes for the team as well as Aakash “a BYJU’S representative stated.
“Please be aware that a subsidiary and the parent firm may only lend money to or receive it for “primary business activities.” The primary business activity in this instance is marketing for BYJU’S Aakash’s core company, for which the organisation has already incurred expenses and is already receiving reimbursement “he Added.

BYJU'S obtains Rs 300 billion loan from Aakash Educational Services

One of the largest purchases in India’s education sector occurred when BYJU’S acquired Aakash in April 2021 for a price of about $950 million in cash and equity. The most recent development occurs while BYJU’S has been concentrating on cost-cutting to get through the funding winter.

To reduce costs as the company’s losses worsen, BYJU’S announced earlier this month that it will be letting go of 2,500 employees, or around 5% of its staff, from its product, content, media, and technology teams. BYJU’S, whose market worth was last estimated at $22 billion, reported wider losses of Rs 4,564.38 crore in FY21, which is a 14X increase over the loss reported in FY20 of Rs 305.5 crore. This month, the business raised an additional $250 million from its current investors, including QIA (Qatar Investment Authority).

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