Comeback On The Cards? Chaudhry Might Return As Aakash CEO

Aakash Chaudhry, the promoter of Aakash Institute, is likely to return as the CEO of the offline test prep chain as part of the share swap being finalised with its owner BYJU’S.

The share swap deal was a part of the acquisition announced about two years ago. He will be replacing incumbent Abhishek Maheshwari who left Aakash last month, according to an ET report.

Chaudhry served as the CEO till November 2020.

Chaudhry is likely to retain his 9% stake in Aakash, while he’ll get around 1-2% in BYJU’S parent Think & Learn at around $11 Bn – $12 Bn valuation. The transaction is expected to be finalised this month, this person added.

After the transaction, Think and Learn is likely to own at least 51% in Aakash. Private equity firm Blackstone currently has around 12%, while promoters, the Chaudhry family, hold an 18% stake in Aakash.

The development also comes more than a month after Aakash Institute had set up an executive council to appoint a new CEO after Maheshwari’s exit early September.

For a recap, BYJU’S had acquired Aakash in 2021 for $950 Mn in the biggest acquisition deal in the Indian edtech space. The original deal included 70% payment in cash and the rest in equity.

The offline test prep chain has been long touted as being one of BYJU’S most valuable assets, with its strong brand image and cash flow situations. However, while there were media reports suggesting some disagreements between the two parties, those seem to have been ironed out.

The offline test prep chain is looking to go for an IPO in mid-2024, it said in a June statement.

Aakash has not filed its financial statements for FY22 with the Ministry of Corporate Affairs. In FY21, Aakash’s revenue from operations dropped 23.5% to INR 982.7 Cr from INR 1,214 Cr in FY20.

Its profit also dropped 73.6% to INR 43.6 Cr in FY21 from INR 165.7 Cr in FY20.

Aakash’s cash flow also served as collateral for BYJU’S securing a $250 Mn (INR 2,000 Cr) credit line from Davidson Kempner, which ran into trouble as the lender called for accelerated payments citing a breach in one of the loan covenants.

Incidentally, Manipal Group chairman Ranjan Pai may invest as much as $300 Mn in Aakash Institute, to acquire a larger stake in the brick-and-mortar business. 

He is close to investing $170 Mn which will be used to clear the Davidson Kempner debt BYJU’S secured in May this year.

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