The tutoring segment in Byju’s upcoming IPO could be valued at $4 billion
- ByStartupStory | November 4, 2022
According to persons familiar with the situation, Byju’s, the largest online education provider in India, is completing plans for a $1 billion initial public offering of its tutoring division, Aakash Educational Services.
As it searches for arrangers for the listing, the company is in discussions with at least four foreign banks, including JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley, as well as Indian banks like Kotak Mahindra Bank Ltd. and Axis Bank Ltd., according to one of the people who asked not to be identified discussing private conversations. According to the source, the asset might be worth between $3.5 billion and $4 billion.
A Draft Red Herring Prospectus, which is required to start the IPO process in India, is expected to be submitted in January or February, according to the individuals, and Byju’s might choose the lead bank within two weeks. According to them, Byju’s hopes the IPO would happen in late August or early September.
The three-decade-old Aakash, which Byju’s purchased for roughly $950 million last year, operates physical centres to assist teens in getting ready for the demanding exams that 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 representative declined to respond. Citigroup and Goldman Sachs representatives declined to comment, while JPMorgan, Morgan Stanley, Kotak, and Axis representatives took a while to react to requests for comment.
Given that it assisted Aakash in getting ready for its Indian stock market debut a few years ago, Citigroup is among the front-runners to manage the IPO. The plans were abandoned, and Blackstone Inc. was brought on as a partner in their place of them.
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 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 own stock market because the global economy isn’t encouraging new technological breakthroughs. Although Byju’s had been in talks with several special purpose acquisition entities for a listing, such plans have been put on hold due to 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 inspire Byju’s to conduct IPOs for other recent acquisitions as well.
Follow Startup Story
Related Posts
