Ranjan Pai’s Family Office To Pump INR 250 Cr In Cash-Strapped Aakash

Ranjan Pai’s family office reportedly plans to invest an additional INR 250 Cr in cash-strapped Aakash Educational Services Ltd (AESL) during the coaching chain’s ongoing INR 450 Cr to INR 500 Cr rights issue.

Sources told Livemint that Pai’s family office will invest the funds in tranches, depending on the response of other shareholders and the achievement of certain targets set for the company. 

As per the report, the first tranche of INR 100 Cr has already been approved and will be likely disbursed soon. The remaining is reportedly expected to trickle in the next three months, subject to fulfilment of certain performance metrics. 

Subscribing to the rights issue will further lift Pai’s stake in Aakash. That said, Pai and the Aakash management plan to float a larger funding round by mid-2026, and will be looking to tap into private equity investors. 

Pai’s family office reportedly acquired a 39.6% stake in the coaching chain after the former converted a $300 Mn debt investment into equity in early 2024. Thereafter, the family office also received Competition Commission of India’s (CCI) approval to acquire Aakash founder JC Chaudhry’s 11% stake.

Meanwhile, Pai’s Manipal Education and Medical Group (MEMG) yesterday formally entered the race to acquire troubled edtech startup BYJU’S. As per Economic Times, MEMG said that it has submitted an expression of interest (EoI) to bid for the edtech’s parent Think & Learn Pvt Ltd. 

MEMG is said to have conveyed its intention to review financial and operational information of BYJU’S to assess a potential resolution plan. “Submission of the EoI does not guarantee shortlisting or approval for the next phase. It is, however, understood that MEMG India is the only applicant who has submitted the EoI…,” Manipal Group reportedly said. 

Notably, this is MEMG’s second submission of an EoI after the insolvent edtech’s resolution professional, Shailendra Ajmera, extended the deadline for prospective bidders to submit their applications to November 13. There was no clarity on why Manipal made a second submission of the EoI.

With this, MEMG will have the option to acquire either the entire Think & Learn, or its select assets. With the bid, Manipal is eyeing the minority stake owned by BYJU’S in Aakash. “A successful resolution of TLPL by Manipal will help in business consolidation of Aakash,” Manipal reportedly added in a statement. 

Due to BYJU’S stake, Aakash has been mired in controversies and has been unable to raise funds. The coaching chain’s plan to raise capital via a rights issue was challenged by the edtech startup’s resolution professional. As per report, the RP fears that the rights issue would dilute BYJU’S’ stake in Aakash. 

However, the RP-led BYJU’S and its US-based creditors Glas Trust failed to secure interim relief from the National Company Law Appellate Tribunal (NCLAT) in late October. The Supreme Court (SC) also reportedly declined to admit civil appeals against the tribunal’s decisions. This cleared the way for Aakash to proceed with its rights issue and raise funding. 

With capital infusion on the anvil, things do not look easy for Aakash. The coaching chain has also been struggling with a top-level leadership churn. Chief financial officer (CFO) Vipan Joshi exited the company last month, just two months after CEO Deepak Mehrotra put in his papers. 

On the financial front, Aakash reported a net loss of INR 79.4 Cr in FY23 against a net profit of INR 79.5 Cr in FY22. However, operating revenue soared 68% YoY to INR 2,385.8 Cr in the fiscal under review. The company is yet to file its audited financial statements for FY24 and FY25.