Manipal’s Ranjan Pai eyes Byju’s 42% stake in Aakash

Months after taking a large stake in Bjyu’sowned Aakash Educational Services, Ranjan Pai, Chairman of Manipal Education and Medical Group, is said to be readying to take a large stake in Aakash.

According to several highly placed sources, Pai is eyeing the 42 per cent stake collectively held by Byju Raveendran and Byju’s parent company Think and Learn (see chart).

NO TALKS: BYJU’S

Pai is said to have offered to acquire the stake in Aakash at a valuation of $700800 million, which is at a slight premium to the valuation at which Pai acquired stake in Aakash earlier this year. However, a spokesperson for Byju’s, when contacted over an email, said, “There is no such conversation taking place between Think and Learn and the Manipal Education Group.”

SALEABLE OPTION

For cashstrapped Byju’s caught up in multiple lawsuits, selling a stake to Pai could offer respite to its financials.

In September last year, Byju’s had put two of its subsidiaries, Epic and Great Learning, on the block.

“There hasn’t been any firm interest in these assets so far and there has been no progress in the transaction,” said a person familiar with the matter.

But with Aakash, the crown jewel for Byju’s, selling a stake could be an easier option, fetching better valuations other businesses. vis-à-vis

ALL OR NOTHING

In November 2022, Ranjan Pai invested about $200 million in Aakash to help Byju’s clear its dues to Davidson Kempner and is said to have invested around $300 million so far in Aakash, including the equity conversion that concluded last year.

Expanding his stake to 82 per cent now would strengthen Pai’s position in Aakash’s board.

“Right now, the vetoing power is still with Byju’s and that goes against Pai’s style of operating. He would like to have everything or nothing when it comes to board decisions,” said another highly placed source.

It is also learnt that if Pai’s offer to Raveendran and Think and Learn is turned down, he may want to exit Aakash at a valuation of $600 million. “This is approximately the price at which Pai entered Aakash and his decision has been communicated to the board and Raveendran,” said a source quoted earlier.

Further, with the Chaudhry family, the original promoters of Aakash, backing off from the shareswap deal that would have given them commensurate stake in Think and Learn and was part of the original sharepurchase agreement, it needs to be seen how they would continue to hold interest in Aakash.

Recently, a group of investors in Byju’s parent, Think & Learn, unanimously voted to remove founder Byju Raveendran at the EGM held on February 23.

But the Karnataka High Court extended the interim order asking the shareholders not to bring into effect any resolutions passed by investors at the EGM.

In FY22, Bjyu’s reported a net loss of ₹8,245 crore — up from ₹4,564crore loss in FY21.