BYJU’S Owned Aakash Mints INR 80 Cr In FY22 Profits, Sales Cross INR 1,400 Cr Mark

While the edtech giant BYJU’S is yet to release its FY22 financial report card, its crown jewel – Aakash Educational Services Ltd (Aakash), saw its profit widen by 82% to INR 79.5 Cr in FY22. This marks a significant improvement compared to the INR 43.6 C profit it reported in FY21 on a standalone basis. 

It must be noted that this is the first financial year for Aakash under BYJU’S (more on this later).

In FY22, Aakash, which has one of the widest network of offline learning centres in the country, saw its revenue increase by 45% to INR 1,421.2 Cr from INR 982.7 Cr in FY21. 

This comes in the backdrop of a rise in enrollments at coaching centers, following a period of declining numbers during the Covid-19 lockdowns in 2020 and the early part of 2021. 

However, the company’s profits are almost half of what it earned in FY20, which was INR 165.7 Cr. For context, in FY20, it generated INR 1,214 Cr in revenue.

The offline coaching giant earns revenue primarily from students enrolling at its offline centres and franchise partners. The institute has over 4 lakh students enrolled across 320 centres. 

Including other income, Aakash total income stood at INR 1,464.3 Cr in FY22, a 39% increase from INR 1,050 Cr in FY21. 

Where Did Aakash Spend? 

In FY22, Aakash saw its expenditure jump to INR 1,331.7 Cr, a 37% increase from INR 990.3 Cr in FY21. 

• Employee Benefit Expenses: Being a coaching institute, run primarily by teachers and sales representatives, the company saw its employee cost increase by 35% to INR 722.8 Cr in the year under review from INR 534.1 Cr in FY21. Employee costs comprised 54% of the company’s overall expenditure. The institute has over 5,500 teachers. 
• Advertisement Expenses: The company spent INR 134 Cr on advertising to create brand awareness. This cost was 31% higher than INR 102.6 Cr spent in FY21.

Aakash has been the cash cow for the troubled edtech giant BYJU’S since early 2021. BYJU’S acquired the 35-year-old Aakash for around $1 Bn in April of 2021 – marking the biggest acquisition in the edtech space. This was the second big acquisition by BYJU’S after Whitehat Jr for which it nearly spent $300 Mn. 

At present, BYJU’S parent, Think & Learn Private Limited, is the dominant stakeholder in Aakash with a 40% stake, followed by BYJU’S CEO Byju Raveendran with a 30% share. The Chaudhry family (Aakash Chaudhry) holds an 18% stake, and Blackstone possesses the residual 12%. Aakash Chaudhry held the CEO post till November 2020 and resigned from board in December 2022. 

Besides Aakash, BYJU’S-owned GradeUp also minted profit in FY22. However, auditors have expressed concerns about the acquired business amid its liabilities and erosion of net worth.

BYJU’S Endless Troubles

Desperate for funds to sustain its operations, BYJU’S was reportedly in talks to sell Aakash late last year. The edtech giant engaged in discussions with private equity firms like Bain Capital and KKR regarding the potential sale of Aakash. However, BYJU’S later refuted the reports of selling Aakash.

Aakash is not the only subsidiary which BYJU’S has been trying to sell. 

As per last year’s reports, BYJU’S is also trying to sell Great Learning and Epic for $800 Mn – $1 Bn, to repay its $1.2 Bn Term Loan B which it took in November of 2021.

This comes at a time when the edtech giant has been under fire for several reasons. Board member exits, layoffs, delayed financials, losses, ED wrath and the latest clash with the BCCI.

Besides this, the edtech giant is also cutting around 4,000 employees in another round of layoffs, to cut costs and increase its cash runaway. The edtech giant, which is undergoing a massive restructuring exercise from top to bottom, is yet to file its FY22 financials. However, as per the company’s official statement, Think & Learn Pvt Ltd (excluding its acquired businesses) reported an EBITDA loss of INR 2,253 Cr, while the total income stood at INR 3,569 Cr. 

To make matters worse, the Enforcement Directorate (ED) has been investigating BYJU’S for an alleged FEMA violation to the tune of north INR 9,000 Cr. The Board of Cricket Council Of India (BCCI) dragged BYJU’S to an NCLT court for an alleged dispute over the sponsorship rights of the Indian cricket team’s jerseys. 

Amid the ongoing cash crunch, Byju Raveendran has also mortgaged two family houses and an under-construction villa for $12 Mn to clear the remaining salaries of employees. 

The only respite that the edtech giant has got in the last year is the family office of Manipal Education and Medical Group’s Chairman Ranjan Pai acquiring Davidson Kempner’s debt exposure in Aakash for INR 1,400 Cr. 

Not to forget, BYJU’S is yet to find replacements for three out of six board members who resigned last year.

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