Byju’s clears pending dues to Blackstone in $1 bn Aakash acquisition

Edtech decacorn Byju’s has paid the final tranche of Rs 1,983 crore to private equity firm Blackstone for the acquisition of Aakash Educational Services, a source privy to the development told Business Today.

The company was supposed to clear the pending amount of the big-ticket acquisition Aakash’s investor Blackstone by June 2022, which was then deferred to September 23, 2022.

The big-ticket acquisition worth $950 million was announced in April 2021. Blackstone owned nearly 38 per cent of the online coaching chain before the acquisition.

The Tiger Global-backed company has made acquisitions worth close to $3 billion across 13 deals in the past 18 months including Aakash, Great Learning ($650 million), Epic ($500 million) and Toppr ($150 million).

Byju’s, owned and operated by Think & Learn Pvt Ltd, announced its much delayed financial results for the financial year 2020-21 on September 14. The company’s consolidated losses widened nearly 20 times to Rs 4,588.75 crore for the financial year ended March 2021 from Rs 231.69 crore in FY20. Revenue from operations marginally grew from Rs 2,280.26 crore in FY21 from Rs 2,189 crore in the previous year. Its overall revenue declined a little over 3 per cent to Rs 2,428.39 crore in FY21 from Rs 2,511.77 in the previous fiscal.

The company’s overall expenses stood at Rs 7,027.47 crore in FY21, up from Rs 2,873.34 crore in FY20. Notably, a majority of its spending last year is attributed to ‘business promotion expenses’ which is at Rs 2,251 crore, up from Rs 900 crore in the previous fiscal.

The company attributed the subdued growth to a change in the way it recognises revenue, as mandated by its audit firm Deloitte Haskins and Sells. In the past, it recognised revenues of streaming services fully at the beginning of multi-year subscriptions which are now being booked over the period of consumption. Also, the loans availed by its customers can’t be recognised until the instalments are collected. This meant that the company could not book Rs 1,156 crore of revenue coming from deferred payment terms in FY21.

“There was significant business growth in FY21 over FY20, but since this is the first year where new revenue recognition started because of a Covid-related business model change, almost 40 per cent of the revenue was deferred to subsequent years. The rationalised growth between FY21 and FY20 is a result of the changes made in the way BYJU’S recognises its revenue, as advised by its auditors,” the company said at the time of announcing the results.

As per the statement from the company, the Bengaluru-based firm clocked nearly Rs 10,000 crore in gross revenues in FY22, Rs 4,530 crore of which came during the April-July period. The company also said Aakash and higher education platform Great Learning have since doubled their revenues.

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