Byju’s Targets IPO Valuing Tutoring Arm at Up to $4 Billion
(Bloomberg) -- India's most valuable startup, online-education giant Byju's, is finalizing plans for a $1 billion initial public offering of its tutoring business Aakash Educational Services, according to people familiar with the matter.
The company is in talks with at least four foreign banks -- JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley -- as well as Indian banks including Kotak Mahindra Bank. Ltd. and Axis Bank Ltd. as it seeks arrangers for the listing, said one of the people, who asked not to be named discussing confidential conversations. The unit may be valued at $3.5 billion to $4 billion, the person said.
Byju's could pick the lead bank within two weeks, and a Draft Red Herring Prospectus, the document to kick off an IPO process in India, is set to be filed in January or February, the people said. Byju's aims for the IPO to take place around August-September, they said.
The three-decade-old Aakash, acquired by Byju's for about $950 million last year, runs brick-and-mortar centers to help teenagers prepare for the grueling tests that rank them for entry into coveted schools such as the Indian Institute of Technology. The offline test prep leader has more than 200 centers dotting the country and has ramped up its digital test prep offerings as well.
A spokeswoman for Byju's declined to comment. Representatives for Citigroup and Goldman Sachs declined to comment, while JPMorgan, Morgan Stanley, Kotak and Axis didn't immediately respond to requests for comment.
Citigroup is among the frontrunners to lead the IPO since it had helped Aakash prepare for a stock-market debut in India a few years ago. The plans were shelved and Blackstone Inc. came on as an investor instead. The conversations with bankers were earlier reported by TechCrunch.
Aakash's annual revenue is set to double in the current year ending in March 2023 and its operating margin is about 20%. The strong financials make Aakash stand out among India's recent IPOs -- high-profile but unprofitable tech companies Paytm, Zomato Ltd. and Policybazaar have floundered since their debuts.
Meanwhile, Byju's has put talks over its own stock-market listing on the back burner, said one of the people, as global markets aren't supportive of fresh technology debuts. Byju's had been in conversations with multiple special purpose acquisition vehicles for a listing but a global economic slowdown and slumping tech stocks have stalled those plans.
A successful Aakash listing could encourage Byju's to do IPOs for other recent acquisitions too, and higher-education platform Great Learning could be considered next though it's much smaller in size, one of the people said.
(Updates with banks' responses in the fifth paragraph)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
