Ranjan Pai may invest additional $50-60 million in Byju's-owned Aakash

Ranjan Pai, the chairman of Manipal Education and Medical Group and the largest shareholder in Byju's-owned Aakash is set to invest an additional $50-60 million in the brick-and-mortar coaching network company over time, according to a report by The Economic Times (ET). This comes amid discussions suggesting a new capital infusion for Aakash ahead of the crucial student enrollment season, despite legal notice from Prosus, an investor in Byju's parent Think & Learn.

It has also been suggested that Pai intends to make additional investments in Aakash to spur business growth and scale the business during the upcoming enrolment season.

The legal notice sent to Pai over the conversion of debt into equity in Aakash, while highlighting potential dissent among Byju's investors, may not have a material impact, the ET report added, especially as the board of Aakash approved Pai's conversion, which resulted in him holding a majority 40 per cent stake in Aakash Institute.

Aakash Education Services Ltd (AESL), specialising in coaching for medical and engineering students, was acquired by Byju's parent company, Think & Learn, for $950 million in 2021. Ranjan Pai's proprietary fund, Aarin Capital, was one of the first institutional investors in Byju's in 2013.

The acquisition of Aakash Institute in April 2021 marked one of the largest in the Indian startup ecosystem, valued at about $1 billion. Before Pai acquired a larger stake in the company, shares were divided among Blackstone Group, Aakash Institute founders (Chaudhary family), Think & Learn and Byju Raveendran.

Blackstone Group and the Chaudhry family collectively held 30 per cent, Think & Learn had 43 per cent, and Raveendran had a 27 per cent stake in Aakash Institute.

In November 2023, Ranjan Pai acquired Davidson Kempner's debt exposure in AESL for Rs 1,400 crore, providing significant relief to Byju's amid legal and financial challenges. As part of this transaction, Pai was in discussions to invest up to $300 million (around Rs 2,500 crore), with the Aakash board recently approving the conversion of this investment into equity, valuing Aakash Institute at approximately $700 million and positioning it as a debt-free entity.