Byju's, an edtech company, reduced its main business losses to Rs 2,253 crore in FY22

 Byju's, an edtech company, reduced its main business losses to Rs 2,253 crore in FY22

The lessons I've learned in the post-pandemic world of readjustments have also humbled me. In the next years, Byju's will persist on its lucrative and sustainable development trajectory, according to group CEO and founder Byju Raveendran.

With its acquisitions excluded, the edtech decacorn Byju's reduced its losses to Rs 2,253 crore. According to a statement released by Byju's on November 4, the edtech business recorded an EBITDA loss of Rs 2,253 crore in FY22, which is about 6.36 percent less than the Rs 2,406 crore loss it posted in FY21.

This comes after Byju Raveendran, the company's founder and CEO, said that it is on track to turn a profit by the fiscal year 2024, however that date still seems far off.

"Lifelong lessons were learned during a particularly aggressive year that saw nine acquisitions. The primary company has grown well, highlighting edtech's promise in India, the main economy with the quickest pace of development. The lessons I've learned in the post-pandemic world of readjustments have also humbled me. In the next years, Byju's will keep growing profitably and sustainably, according to group CEO and founder Byju Raveendran.

Excluding all acquisitions, the company's sales increased to Rs 3,569 crore from the Rs 1,552 crore recorded in the previous year. Indeed, Byju's predicted in September 2022 that its gross sales would reach Rs 10,000 crore in the next fiscal year.

Byju's FY22 financial results coincide with the company's announcement of a roughly 3% decline in FY21 sales from the previous fiscal year, which the edtech company attributes to an adjustment in accounting procedures.

Results are delayed

In the past, Byju's investors and management had reached an agreement for the firm to provide FY22 results by the end of September and FY23 results by the end of December.

Byju's, who had been without a full-time CFO for over two years, likewise had an approximately 18-month delay in its FY21 results. In April, the business hired Ajay Goel, a former executive from Vedanta, to serve as its CFO.

Deloitte, Byju's longtime auditor, also left in June, citing a delay in releasing FY22 numbers. Deloitte had previously raised concerns about the company's revenue recognition techniques for its accounts in FY21. BDO was then hired by the business, which was billed as the most valuable startup in India.

According to the corporation, the combined statistics would be shared with the Ministry of Corporate Affairs within the following three weeks.

Despite being released almost two years after the fact and representing a snapshot of almost two years ago, the FY22 results are quite significant. In FY22, the pandemic's second year, Byju's secured almost $3 billion in financing and equity while acquiring at least eight significant domestic and international firms. This was a boost to India's edtech industry.

Byju's closed FY22 on a high note, becoming the nation's most valued startup after closing a large $800 million investment round at a $22 billion valuation. But since then, a number of disputes have surfaced.

The story began when Deloitte, Byju's longtime auditor, refused to approve the company's FY21 (2020–21) reports, causing the data to be released more than eighteen months later than expected. Subsequently, there were widespread media stories about purported misrepresentation and haphazard termination of tens of thousands of workers.

The company's predicament became much worse in FY23 when the board of directors and top management both unexpectedly left, making matters worse.

Examining Byju's

The Employees Provident Fund Organization (EPFO) and the Enforcement Directorate, India's financial investigation agency, among other ministries and government agencies, looked into the firm.

Byju's had trouble handling its $1.2 billion term loan B with foreign creditors in addition to its domestic problems. Due to technical loan defaults, these creditors expedited the payback plan towards the end of the previous year. One of the conditions of the loan was that Byju's provide monthly business updates to creditors; according to media sources, Byju's failed to comply with this requirement.

Following months of talks with lenders, Byju's offered in September of this year to return the whole $1.2 billion loan in six months, with a $300 million down payment in three months. Byju's listed two of its most valuable assets for sale: the US-based book reading platform Epic and the upskilling platform Great Learning. The company anticipates making around $800 million from the transaction.

Lenders, who own a sixty percent stake in Great Learning, hired risk consultancy firm Kroll earlier this week to safeguard the company's assets, especially in case of a management buyout.

Furthermore, Byju's has been negotiating with Davidson Kempner, an investment company located in the United States that pledged around $250 million in structured instruments associated with future cash flows from Aakash Educational Services, Byju's biggest asset.

But even on the Davidson Kempner loan, Byju's had a technical default, which is what prompted the US-based investor to want to take over Aakash. Byju's managed to raise a mere $100 million after the investment business withheld a substantial chunk of the proceeds.

Byju's is now in talks to obtain money to pay back the loan to Davidson Kempner plus interest with one of the company's original investors, Ranjan Pai. According to an October 12 story in the Economic Times, Pai would think about investing between $250 and $300 million in Aakash, with a $170 million down payment intended to pay back Davidson Kempner.