Indian edtech company Byju’s has announced its plans to launch the initial public offering (IPO) of its subsidiary, Aakash Education Services Limited (AESL), by the middle of next year. AESL is expected to generate revenue of Rs 4,000 crore and an operational profit (EBITDA) of Rs 900 crore in the fiscal year 2023-24. Byju’s acquisition of AESL in April 2021 for approximately $950 million has resulted in a threefold increase in revenue over the past two years.
Board Approval and Future Prospects
Byju’s board has officially sanctioned the IPO and will soon announce the appointment of merchant bankers to ensure a successful listing in the following year. The IPO is expected to provide a significant capital infusion to strengthen Aakash’s infrastructure, expand its reach, and offer high-quality test-preparation education to a larger student population nationwide.
Growth Potential and Market Outlook
The test-preparation market is predicted to experience robust growth, with revenues projected to increase at a compound annual growth rate (CAGR) of 9.3% from 2020 to 2025. The online test preparation segment, in particular, is expected to grow at a CAGR of 42.3% during the same period. Aakash is well-positioned to capitalize on this growth due to its wide range of offerings, combining classroom-based learning with cutting-edge digital products and services tailored for engineering and medical entrance exams.
Byju’s decision to launch the IPO of Aakash Education Services Limited reflects its strategic expansion plans and capitalizes on the growth potential of the test-preparation market in India. With the anticipated capital infusion, Aakash aims to enhance its infrastructure and broaden its reach, providing high-quality educational resources to a larger student base across the country.
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