Ranjan Pai-led Manipal Group gets CCI approval to acquire stake in Byju's-owned Aakash Institute

The Competition Commission of India (CCI) has approved the acquisition of a significant stake in the test preparation firm Aakash Educational Services Limited by Manipal Health Systems Pvt Ltd and MEMG Family Office LLP by converting debt into equity.

Background of the acquisition

Ranjan Pai, the Chairman of Manipal Education and Medical Group, acquired Rs 1,400 crore of debt in Aakash Educational Services last November to aid troubled edtech startup Byju's in settling its debt to US-based Davidson Kempner Capital Management.

The debt was secured using Byju's shareholding in Aakash as collateral. In January, the Aakash board approved the conversion of Pai’s $300 million investment into equity, making Pai the largest shareholder with a 40% stake.

Details of the transaction

The CCI said that the transaction involves the allotment of identified equity stakes in AESL to Manipal Health Systems and MEMG Family Office LLP.

Manipal Health Systems operates hospitals and provides healthcare services, while MEMG Family Office offers consultancy services.

The approval includes the right to seek the transfer of certain equity shares of AESL. 

AESL's financial performance

AESL, which was acquired by Byju's in a mega deal for $950 million in 2021, has shown impressive growth. For the financial year ending March 2022, AESL reported a profit of Rs 79.5 crore, an 82.2% increase from the previous year.

The company's operating revenue also surged by 44.6% to Rs 1,421.3 crore.

It provides coaching services through classroom-based, online, distance learning, and hybrid programs, serving over 400,000 students across more than 310 centres nationwide.