Byju's Aakash Deal: What $2 Billion Really Means

byKESHAVA •
0

Split illustration showing Byju's $22 billion valuation collapsing into dust on one side and Aakash valued at $2 billion on the other side

You've probably heard of Byju's. Maybe as India's biggest online-learning success story. Or maybe as a company that fell apart in the news. If you're not sure how both of those things can be true, you're exactly who we call a "Wanderer" here at The Bazaar Guru. This post connects the dots, in plain, simple language.

In 2022, Byju's was the most valuable education-technology (edtech) company in the world. On paper, it was worth $22 billion, more money than several of India's biggest listed companies put together. By October 2024, its own founder said it was worth nothing.

Now, in July 2026, one small part of the Byju's group is back in the news. It's a coaching institute called Aakash, and it has just been valued at around $2 billion in settlement talks with lenders.

So how did a $22 billion company fall to zero, while one piece of it is still worth $2 billion? This story is actually a simple, useful lesson in how company "value" really works.

What Actually Happened This Week

Byju's borrowed a large amount of money from a group of foreign lenders. Those lenders never got fully paid back, and for years they have been fighting Byju's founder, Byju Raveendran, in court.

Now, both sides are close to a deal. The lenders would get roughly 30% ownership (called a "stake") in Aakash Educational Services, a company Byju's partly owns. In return, they would drop all their legal cases against Raveendran. This settlement values Aakash at around $2 billion.

As of this writing, nothing is final yet. The case is being heard by the National Company Law Tribunal (NCLT), a special court in India that handles companies which can't pay their debts. The Bengaluru bench of this court was told the two sides were close to an agreement, and gave them until July 16, 2026 to sort out the final paperwork.

That date happens to be exactly two years after the same court first placed Byju's parent company under "insolvency" proceedings, which simply means a legal process for a company that cannot pay what it owes. That happened on July 16, 2024.

If this deal goes through, the lenders would finally recover part of the roughly $1.2 billion they say they are still owed. And Raveendran would be free of years of court cases in India, Singapore, and the United States.

How Byju's Went From $22 Billion to "Worth Zero"

Byju's was started in 2011 by Byju Raveendran and Divya Gokulnath. It grew fast, especially during the Covid-19 pandemic when many students were learning from home. At one point, Byju's said it had over 150 million registered students, and in early 2022 it was valued at $22 billion, making it the world's most valuable edtech company.

Things started going wrong for a few clear reasons. Byju's spent huge amounts of money buying other companies, including Aakash for close to $1 billion, a US reading app called Epic for $500 million, and a games company called Osmo for $120 million.

All this buying meant Byju's was spending far more than it was earning, even while its total sales kept growing. One way to check if a company is actually making money from its core business is to look at a number called EBITDA, which simply means the profit a business makes from its everyday operations, before you subtract things like interest on loans, taxes, and the wear and tear on equipment.

When students went back to school after the pandemic and online tutoring became less popular, this spending problem became harder to hide.

By January 2024, a major investor called BlackRock cut its estimate of Byju's value by 95%, bringing it down to around $1 billion. Soon after, Byju's raised emergency funds at a value of just $225 million, a fall of about 99% from its 2022 peak.

In July 2024, the court placed Byju's parent company under insolvency proceedings. By October 2024, Raveendran himself told reporters the company was effectively "worth zero."

What Is Aakash, and Why Are Lenders Fighting Over It?

Aakash Educational Services is a well-known coaching institute chain that helps students prepare for medical and engineering entrance exams. Byju's bought it for close to $1 billion in 2021.

Unlike much of the rest of the Byju's group, Aakash still runs a real, working business, with more than 300 centres, over 5,000 teachers, and last-reported yearly revenue of about $254 million (a rough conversion at current exchange rates puts this at roughly ₹2,100 crore, though this figure isn't itself a reported number).

Ownership of Aakash today is split three ways, and each part is disputed. Manipal Group, led by businessman Ranjan Pai, owns the largest share, roughly 58%, after several rounds of buying more shares over time.

Byju's parent company owns about 25.75% of Aakash. This portion has been protected by an order from India's Supreme Court while the wider legal fight continues. A further, smaller portion of shares, tied personally to Raveendran through a company based in Singapore, is caught up in a separate dispute involving a large foreign investor.

It's this tangled, three-way ownership question, not how well Aakash's coaching business is actually doing, that the current settlement talks are trying to sort out. One thing worth knowing: these percentages come from separate news reports, and no single source lays them all out together in one clean ownership chart, so treat the exact numbers as roughly right rather than exact.

The $2 Billion Question: How Was This Number Decided?

For a company listed on the stock market, like most companies you'd buy shares in through a broker, anyone can check its price the moment the market is open. Aakash's $2 billion figure isn't a market price like that at all. It's a number that a small group of people negotiated to settle a legal dispute, and it could still change before anything is signed.

For a listed company, you can check if a price seems fair using simple tools like the P/E ratio, which just tells you how many rupees investors are paying for every rupee of the company's yearly profit. A private company like Aakash has no such public check. Its "value" is simply whatever the most recent deal, fundraising, or in this case, legal settlement, says it is.

That $2 billion number is shaped as much by what each side wants as by how Aakash's business is actually doing. The lenders want to recover as much money as possible. Manipal wants the legal fight to end cleanly. Raveendran wants to stop being personally sued. All three of these wants are baked into the price on the table.

Lesson 1: A Private Company's "Value" Is Just an Opinion Until Someone Actually Pays

When people said Byju's was "worth" $22 billion, that number came from a small group of investors who each bought a small slice of the company. It was never tested by a real, open market where lots of buyers and sellers set a price all day, every day, the way stock prices work.

The moment one big investor, BlackRock, took a closer look and cut its estimate by 95%, the headline number fell just as fast, without a single share actually being bought or sold on an exchange.

That's the key difference between a private company and a listed one. A listed company's share price is set again and again, all day, by anyone who wants to trade. A private company's value is set rarely, by a handful of people, and can be changed overnight.

Lesson 2: A Loan Doesn't Care How Good Your Growth Story Sounds

No matter how impressive a company's valuation looks, its loan repayments still fall due on fixed dates. A big "value" on paper doesn't pay a single rupee of that bill.

Byju's fight with its lenders began because it could not pay back around $1.2 billion in loans on time. That single problem led to years of court cases in three different countries. Even a company once valued at $22 billion can be forced into insolvency if it cannot pay its debts when they're due.

You may also want to read: How Haldiram's Became a $10 Billion Snack Empire

Lesson 3: One Good Business Can Outlive a Bad Company

Even as the rest of the Byju's group fell apart, Aakash kept running its coaching centres and kept enrolling students. Unlike Byju's main online-tutoring business, Aakash had real customers paying directly for a service they actually used and valued.

That's exactly why lenders are fighting so hard over Aakash and not the rest of the Byju's group. It's the one part of the company whose value didn't disappear. The lesson for any investor is simple: judge each part of a business by its own numbers, not by the reputation of the bigger company it belongs to.

Common Mistakes Investors Make When Reading Startup Valuations

  • Thinking a big valuation means the company has that much cash. A $22 billion "value" was never money Byju's could actually spend. It was just an estimate based on the price of a tiny slice of the company.
  • Assuming a large fundraise means the company is profitable. Raising money and making money are two very different things. Big fundraises often just cover big losses.
  • Ignoring how and when loans need to be repaid. An impressive growth story does not push back a loan's due date.
  • Thinking "unicorn" (a company valued over $1 billion) automatically means financially healthy. Crossing that number says nothing about whether a company can actually pay what it owes.
  • Not checking exactly who owns how much. As Aakash's tangled, three-way ownership shows, who owns what can matter just as much as the headline value.

FAQ

What is Aakash Educational Services?
Aakash is a well-known coaching institute chain that helps students prepare for medical and engineering entrance exams. Byju's bought it for close to $1 billion in 2021. It's one of the few parts of the Byju's group that still earns real, meaningful revenue.

Why did Byju's valuation fall to zero?
A mix of reckless spending on acquisitions, falling demand once students went back to school after the pandemic, delays in publishing its financial results, and an inability to repay around $1.2 billion in loans, led investors to cut their estimate of Byju's value again and again, until its founder called it "worth zero" in October 2024.

How is a private company's value different from a listed company's share price?
A listed company's share price is set continuously through public trading on a stock exchange. A private company's value is set rarely, usually during a fundraise or a legal settlement, by just a handful of people, which makes it much easier for that number to change suddenly and sharply.

What happens if the Byju's-Aakash settlement goes through?
Byju's lenders would get roughly a 30% ownership stake in Aakash and would drop all pending legal cases against founder Byju Raveendran, likely ending years of court battles across India, Singapore, and the US.

Is Aakash still owned by Byju's?
Only partly. Manipal Group holds the largest share, roughly 58%. Byju's parent company owns about 25.75%, which is currently protected by a Supreme Court order. A further portion tied to founder Byju Raveendran is separately disputed.

What is GLAS Trust?
GLAS Trust represents the group of lenders that Byju's owes roughly $1.2 billion to. It is the party leading the current settlement talks over Aakash.

Key Takeaways

  • A private company's "value" is just an estimate agreed by a few people, not a real market price. It can collapse without a single share ever being bought or sold.
  • Loan repayments don't wait for a company's growth story to play out. Missing a loan payment, not a falling valuation, is usually what actually pushes a company into trouble.
  • Even inside a struggling company, one part with real, paying customers can still hold genuine value.
  • Always try to find out who actually owns how much of a company. It can matter as much as the headline value.
  • The Byju's-Aakash settlement isn't finished yet. The terms could still change before or during the July 16, 2026 court hearing.

Go Deeper

Disclaimer: This content is for educational purposes only and should not be considered investment advice. Markets carry risk, and past patterns do not guarantee future performance. Please consult a SEBI-registered investment advisor before making any investment decisions.
Tags:

Post a Comment

Previous Post Next Post