Ranjan Pai, the chairman of Manipal Education and Medical Group, is poised to become the predominant shareholder in Aakash Institute, a company owned by Byju's, holding a 40% stake, as per information reported by The Economic Times (ET). The Aakash board has purportedly approved the conversion of Ranjan Pai's $300 million investment, made in 2023, into equity. This strategic move places the valuation of Aakash Institute, a significant asset for Byju Raveendran amid challenges in the edtech sector, at around $700 million and positions it as a debt-free entity.
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Aakash Education Services Ltd (AESL), a coaching center catering to medical and engineering students, was acquired by Think & Learn, Byju's parent company, for $950 million in 2021, marking one of the largest acquisitions in the Indian startup ecosystem at the time.
Ranjan Pai's proprietary fund, Aarin Capital, was Byju's first institutional investor in 2013. The acquisition of Aakash Institute by Byju's in April 2021 was valued at approximately $1 billion. Presently, the Blackstone Group and the Chaudhry family (founders of AESL) collectively hold 30% of Aakash Institute, while Byju's parent firm, Think and Learn, retains 43%, and Byju Raveendran holds a 27% stake.
In November 2023, Ranjan Pai acquired Davidson Kempner's debt exposure in AESL for Rs 1,400 crore, providing substantial relief to Byju's, which was facing legal and financial challenges, including a term loan B of $1.2 billion.
During the same transaction, Pai was reportedly in talks to invest up to $300 million (around Rs 2,500 crore), with Rs 1,400 crore allocated to settling the Davidson Kempner obligation. The remaining funds were earmarked for Think and Learn Private Limited, Byju's parent entity. Upon the completion of the full investment, Ranjan Pai was expected to secure a significant 20-25% stake in Aakash Institute, thereby reducing Byju's personal stake in AESL to approximately 12%.
The latest report by ET indicates that Pai's stake in the firm might be nearly double the earlier expectation. However, Aakash Institute has yet to officially confirm these reports.
