The business environment is changing rapidly in terms of technology,
competition, products, people, geographic areas, markets, and customers. It is
not enough that companies keep pace with these changes, but are expected to
outperform the competition and innovate in order to continually maximize
shareholder engagement. Inorganic growth strategies such as mergers,
acquisitions, takeover and spin-offs are seen as key drivers that help companies
enter new markets, grow customer bases, reduce competition, consolidate and grow
rapidly. Corporate restructuring helps companies to deal with poor performance,
to consciously seize new opportunities and to gain credibility in the capital
market. It can also have a huge impact on a company's market value, often in the
The scope of corporate restructuring includes improving profitability (lowering
costs) and improving efficiency (profitability). If a company wants to grow or
survive in a competitive environment, it needs to restructure and focus on its
competitive advantage. The interest groups resulting from the restructuring are
fewer than in the previous state-owned companies.
Despite the fact that there are so many studies on the subject of corporate
restructuring, the studies focus on stakeholders' opinions on corporate
restructuring strategies in companies, or on the implementation of strategies in
companies forecasting what to expect and making sure the company can secure
available capital for these changes. Corporate restructuring can help restore,
maintain and increase the value of an organization in India.
Pandemic turned everything upside down, taking almost everything possible online
and education is no exception to it. Not having an option to go to schools and
coachings can take a toll on the children's mind but the ed-tech start-ups came
as a boon in our lives. Providing education online and easy access with the
comfort of your home, that too within an affordable price is surely what was
felicitous. Studies cannot be compromised be it any situation and to ensure the
smooth functioning of the same we had start-ups like Bjyus.
The article will unveil all the details of the biggest ever $1 Billion
acquisition deal which took place between the BYJU's and the Aakash
Educational Services Limited Institute.
Analysis of corporate restructuring with reference to byju's acquisition of
Blackstone Group backed Aakash Educational Services Limited (AESL) is a 33-year
training institute providing engineering and medical entrance exam preparation
services, school board exams, KVPY (Kishore Vaigyanik Protsahan Yojna), NTSE
(National Talent Search Examination), Olympia and. Offers other entry-level
exams for students in 8 to 10 grades for school authorities and youth
competition exams These offline specialization offerings are divided into three
brands: Aakash Medical, Aakash IIT JEE, and Aakash Foundations.
More than 200 coaching centres across the country. The Aakash Institute started
life when people thought that coaching institutions were not a growing business,
but Aakash built its name and fame in the market by working rigorously and
remaining trustworthy to its students in the education sector from the very
beginning. It has changed with time and student needs.
The company has grown steadily in its four years in the education sector and
launched Byju, the learning app, in August 2015. BYJU'S firmly believes in a
freemium business model in which it offers its customers free and paid (premium)
BYJU's approach of providing knowledge with highly creative visual content, a
one-on-one learning process, and other facilities has quickly led BYJU to
compete successfully. Generation. BYJU'S is backed by renowned investors such
as Mary Meeker, Yuri Milner, Chan Zuckerberg Initiative, Tencent, Sequoia
Capital, Tiger Global and others. It is estimated that more than $ 2 billion
in funding has been raised to date. And companies to expand their offerings and
increase their market share and the penetration of educational technologies
through their subsidiaries.
Here is the list of companies that BYJU's has acquired:
- Vidyartha (2017)
- TutorVista, Edurite (2017)
- Math Adventures (2018)
- Osmo (2019)
- Label App (2020)
- WhiteHat Jr. (2020)
- Toppr (2021)
Agreement Analysis From Collaboration to Acquisition Byju's and the Aakash team
started the dialogue in June 2020 last year, at that time they discussed the
possibility of working together and discussing the Acquisition began in October
and an agreement was reached in December. And in April 2021, BYJU'S finally
acquired Aakash through a strategic merger. They increase their entire stake in
the company in exchange for a 70:30 cash settlement, where they receive an
undisclosed stake in BYJU'S for about 30 percent of the pay-out.
Analysis of how corporate restructuring can be used as a tool of
Increase in Market Share:
Byju's increased its market share by increasing the
demand of its services among the potential customers. During the time of the
pandemic, it successfully promoted the idea that education is an inevitable part
of our lives which should not get hampered due to any given reason. Thus, making
the customers believe that investing in Bjyus is a fair deal.
BYJU'S is growing its wings not only in India but also at
international level. Large scale business requires mass hiring, making byju's
one of the biggest employment generators of the time.
Economies of scale:
Valuation of byju's is over $2 billion due to its solid
customer base globally, therefore increasing its economy of scale.
Byju's adapted new ways of learning through online mode with
better use of technology, making online learning as fruitful as that of
Strategize marketing along with customer satisfying services makes
it count as a strong brand.
Byju's somewhat has a monopoly in the market, greatly because of its
goodwill. It therefore dominates various other EdTech start-ups, giving them a
tough run for its survival.
Bjyus offers various courses starting from kindergarten level
to Post Graduation level. Variety of courses along with various learning options
makes it one of its kind.
Revival of Sick Company: Growing with such a positive graph surely makes byju's
a strong rival of sick companies.
Collaboration with Akash helped Byju's in its commitment to developing
impactful learning experiences for students by the addition of new verticals,
subjects, and languages to the same platform.
Pandemic gave a chance to explore various things which could
possibly work for you. Bjyus took the same chance and made a strategic alliance
with one of the big names in the field of education, 'Akash
One of the biggest acquisitions of the time happened between Bjyus
and Akash, making it a deal of $1 billion.
What are the problems of corporate restructuring in India and how strategically
it is tackled by byju's?
The positive work culture at BYJU'S sets an extraordinary example in front of
the world at large where still in many places employees are considered not less
than robots. Holistic employee wellness programs are organized to ensure comfort
of the newly appointed work force and also to give them a boost to work better
towards ensuring quality service to the customers. Workshops like mind
management, guided meditation, fun contests, LIVE sessions, etc, are being
arranged. BYJU'S is also creating a pool of employment by hiring in handsome
numbers for both technical and non-technical positions.
The burst of investment for the edtech business coincides with a boom in demand
for online instruction during the state wide lockdown in late March, when remote
learning substituted physical classes. According to some undisclosed sources,
apart from previous investments, an added amount of $11.1 billion had been
accumulated by three novel investors namely BlackRock, Sands Capital and Alkeon
Loss of Assets
Byju's is not just India's most admired start-up, but also the world's most
valuable ed-tech start-up, with a net worth of $16.5 billion. In fiscal 2020,
Byju's revenue from operations climbed by 82.31 percent per year to Rs. 2,381
crores. Byju's net loss increased from Rs 8.82 crore to Rs 262.1 crore in just a
year which is almost 30% increase in net losses every year. In FY20, India
accounted for 75.4 percent of the company's annual turnover. Byju's India
revenue from operations amounted to Rs 1,795 crore, up 59 percent year on year.
Byju's revenue from outside India surged by 232.2 percent year on year to Rs 586
crore in FY20.
Decreased Public Image
The marketing team of BYJU'S did a commendable job by bridging a gap between
children and their parents by unique advertising. It is very well aware of the
target audience and therefore comes up with different ways to gain their trust.
Byju's has been one of the most trusted edtech platforms, maintaining good
grounds in India as well as abroad.
Corporate restructuring has become very popular over the years, especially in
the last two decades due to the rapid changes in the industry and skilled
leadership. The speed with which the plan is being integrated, all this overlaps
for the implementation of corporate restructuring. While the restructuring
agreements are being made, not only the monetary aspects of acquiring a company,
but also the cultural and personal aspects of both companies must be examined
for proper integration after acquisition.
Byju's is an Indian multinational
educational tech giant which is valued at $18 Billion. BYJU'S had a strong
presence across urban markets even before the pandemic fuelled the recent
Ed-tech boom. The future of learning is hybrid and this union will bring
together the best of offline and online learning. The high-tech as well as tried
and tested platform of BYJU combined with the skilled faculty of Aakash
Institutes will prepare a model of hybrid learning.
As far as Aakash Educational
Services is concerned, the deal with BYJU'S will enable them to add online
learning to its services. BYJU'S will not likely make any changes to Akash's
existing core business through its acquisition. BYJU'S is now eliminating all of
its rivals in the education market and strengthening its position.
has bigger goals, bigger challenges and more team support. BYJU'S, the next set
of segments of interest, and possibly acquisitions, could come from other areas
of test preparation such as civil services, government, and banking exams, as
well as entrance exams in law and management. It is considering an initial
public offering over the next 18-24 months.
- Manish Singh, Byju's acquires Indian tutor Akash for nearly $1 billion,
(April. 5, 2021),
- Available at: https://byjus.com/our-investors/
- J Jerry Moses, To engage employees in a hybrid world of work, create a
culture of accountability: Pravin Prakash, BYJU'S, Available at: https://www.peoplematters.in/article/talent-management/to-engage-employees-in-a-hybrid-world-of-work-create-a-culture-of-accountability-pravin-prakash-chief-people-officer-byjus-30794
- New investors value Byju's at $11 billion, Hindustan Times, (Sep. 24,
2020, 01:07 AM IST),
- Itu Rathore, Byju's Revenue Increased 82% YoY In FY20, While Net Loss
Jumped 30X, Dazeinfo Briefs (September. 4, 2021), https://dazeinfo.com/2021/09/04/byjus-revenue-expenses-net-losses-in-fy20/
- Yamya Pandey - Bharti Vidyapeeth Deemed University, New Law
- Pravar Agrawal - Bharti Vidyapeeth Deemed University, New Law