Manipal Education Group's Ranjan Pai picks up 40% stake in Byju's subsidiary Aakash Institute: Report

Byju’s-owned company, test-prep business Aakash Institute may have got a new investor. The chairman of Manipal Education and Medical Group, Ranjan Pai, has reportedly bought 40 per cent stake in the company, a news report said on Thursday. According to sources in the know, the Aakash board has approved the conversion into equity of the $300 million Pai invested in 2023. Following the conversion, the company's valuation would stand at around $700 million, rendering it debt-free, The Economics Times reported.

Edtech major Byju’s, which had been going through a rough phase, had acquired IPO-bound Aakash Institute for $950 million in 2021 as part of its aggressive mergers and acquisitions strategy. Aakash Institute was one of its largest acquisitions.

"He has been closely involved with Raveendran in sorting out the Davidson Kempner debt issue and other matters too,” he said, adding that Pai can be crucial for both Aakash and Byju’s.

Business Today could not independently confirm the development.  

Earlier this month, Aakash Institute reported an 82 per cent surge in its total profit to Rs 79.5 crore for FY2022. Its operating revenue during the period grew 45 per cent to Rs 1,421 crore, as per data shared by the company with the Ministry of Corporate Affairs. 

The company said that around 88 per cent of Aakash’s operating revenue came from the coaching fees at Rs 1,282.3 crore. Revenue from the franchise’s part of its business was about Rs 139 crore.

The company said there was a significant increase of 35 per cent in its employee-related expenses, which is its highest cost category, reaching Rs 722.8 crore. This represents approximately 54 per cent of the total expenses, which rose by 34 per cent to Rs 1,331.8 crore.

Aakash Institute offers classes and study material for medical and engineering school entrance tests, like NEET and IIT-JEE, for undergraduate students. It also offers classes for Olympiad and NTSE and basic classroom curriculum.

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