The largest shareholder in Aakash Institute, Ranjan Pai, chairman of Manipal Education and Medical Group, is likely to infuse more capital into the company. According to a report by The Economic Times, Pai is expected to invest an additional $50-60 million over a period of time in Aakash Institute.
People familiar with the development informed the news platform that the fresh injection of capital is likely to occur ahead of the key student enrollment season. "Pai is planning to make additional investments in Aakash for the business to grow and expand. Everyone has been waiting for a long time for the conversion, but nothing was progressing, and if anything, time is critical for Byju’s and its group companies," said a person aware of the development.
Pai is poised to become the largest shareholder in Aakash Institute with a 40 percent stake in the company. The company's board had approved the conversion of his $300 million investment from 2023 into equity, valuing the company at approximately $700 million.
The coaching institute requires additional investments from Pai to run its operations and scale the business during the next few months ahead of the enrollment session, the report added.
The news comes after reports that Prosus NV, a Netherlands-based global investment firm, sent a notice to Pai. Blackstone and Prosus have conveyed to Think and Learn that the move could dilute the value of their stake in the company.
Shareholders have argued that the recent approval by Aakash's board for the conversion was granted based on a much lower valuation of Rs 4,500 crore to Rs 4,800 crore compared to the price BYJU’S paid in 2021 to acquire Aakash, which was about $950 million.
Investors further state that if the proposed conversion is approved, it will elevate Pai's stake in the company to 38.6-39.6 percent, making the parent Think and Learn's shares fall to 27 percent from 43 percent.
BYJU's acquired Aakash Institute for $950 million in 2021, in which Pai invested nearly $200 million in Aakash Institute in November 2023.
Aakash reported a 40 percent increase in revenue to Rs 1,491 crore in FY22, with a profit of close to Rs 80 crore, as per the available information.