Byju's test-prep division Aakash to launch an IPO in mid-2024

Byju's, India'sbillion-dollar ed-tech start-up, is all set to hit the market with an Initial Public Offering (IPO) of its test preparationdivision Aakash, a Moneycontrol report said on Monday.

According to the report, Aakash is likely to go public by mid-2024 and Byju's, its parent company, has given the nod to start the IPO process.

The development comes on the same day as the deadline for India's most valuable start-up to pay a quarterly interest of nearly $40 million on a $1.2 billion loan.

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Byju's had bought Aakash, a test preparation platform, for $950 million in April 2021. In the last two years, the company has recorded a three-fold jump in revenue.

"The upcoming IPO will provide a significant capital infusion to bolster Aakash's infrastructure, broaden its reach, and extend high-quality test-prep education to a larger number of students across the nation," various media reports quoted the company as saying.

Aakash Education Services Limited (AESL) revenue is on track to reach Rs 4,000 crore (approximately$500 million)with an EBITDA (operational profit) of Rs 900 crore (approximately $110 million) in the fiscal year 2023-24, the company said in a statement.

Aakash has over 325 centres currently serving more than 4,00,000 students across the country.

According to Ken Research, test-preparationmarket revenues are predicted to grow at a compound annual growth rate of 9.3 percent over 2020-2025, led by the online test preparation segment which is predicted to grow at a CAGR of 42.3 per cent over the same duration.

(With PTI inputs)