Early Investor May Offer Lifeline To Crisis-Hit Byju's

Ranjan Pai, chairman of the Manipal Group and one of the earliest investors in Byju’s, is in preliminary discussions to invest in Byju’s-owned Aakash, Moneycontrol reported. This move could provide a lifeline to the struggling edtech firm, marking a full circle for Pai who had initially invested in Byju’s through Aarin Capital.

What Happened? Pai is expected to invest between $80million-$90 million (₹6,583.2 – ₹7,406.1 crore) via his family office. This investment comes at a crucial time as Byju’s founder, Byju Raveendran, who holds a 30% stake in Aakash, is expected to partially offload his stake to Pai. The company is also seeking an additional $200 million (₹16,458 crore) in Aakash as part of the funding round, with sovereign wealth funds expected to participate.

The funds raised would be used by Raveendran to repay about ₹65,832 crore to Davidson Kempner after Byju's had a technical default on the loan it raised in May. Further, he would also look to release the pledge on shares of Aakash, which he had offered as collateral for the Davidson Kempner loan.

Aakash Educational Services, acquired by Byju's for close to $1 billion (₹8,230 crore) in 2021, has been the company's best-performing acquisition. However, the due diligence for the deal has not been smooth, with shareholders of Aakash reluctant to execute the share swap, citing Byju's declining value.

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