Byju’s borrows Rs 300 Cr from Aakash

Byju’s parent Think & Learn Pvt will take an unsecured loan of Rs 300 crore from its wholly owned subsidiary Aakash Educational Services for its principal business activities. The loan was granted at an interest rate of 7.50 percent per annum.

This comes as the company looks to cut operational costs amid a prolonged funding winter for the edtech sector. Byju’s acquired Aakash in 2021 for a cash and stock deal of almost $950 million. Byju’s said that it would lay off 2,500 employees over the next six months to reduce redundancies and achieve profitability by March 2023.

A Byju’s spokesperson said, “The Rs 300 crore loan from Aakash Educational Services is in effect an advance against the marketing activities and campaigns that Byju’s has been running for Aakash. In order to benefit from the economies of scale, Byju’s buys media spots in bulk for all its group companies. This is a strategy that has yielded really positive results for both the group and Aakash.”

The spokesperson added that it is only for principal business activities that a subsidiary and the parent company can give or receive loans. “In this case, the principal business activity is marketing for the core business of Byju’s Aakash on which the group has already spent and is now being reimbursed,” the spokesperson said.