Key Highlights:
- Byju’s in discussions to raise $400 million to $600 million and then expedite preparations for an initial public offering next year.
- Morgan Stanley, Citigroup Inc., and JPMorgan Chase & Co. are among the banks involved in the negotiations.
- Paytm has filed the preliminary documents for what may be India’s largest IPO to date, valued at $2.2 billion.
Byju’s puts IPO plans
According to sources familiar with the issue, India’s most valued startup, online education provider Byju’s, is in discussions to raise $400 million to $600 million and then expedite preparations for an initial public offering next year. The Bangalore-based business may complete its pre-IPO financing in a few weeks at a valuation of roughly $21 billion. The proceeds will most likely be split nearly equally between equity and debt.
Byju’s, managed by former teacher Byju Raveendran, plans to submit its initial IPO paperwork as early as the second quarter of next year, just after the conclusion of its fiscal year in March. It has previously considered a time frame of 12 to 24 months. According to the sources, the firm and its financiers are considering a valuation of $40 billion to $50 billion, however, the ultimate decision would be based on financial outcomes and investor demand.
Banks chase Byju’s for IPO
Morgan Stanley, Citigroup Inc., and JPMorgan Chase & Co. are among the banks involved in the negotiations, according to one of the sources. The current fundraising is being conducted by the same banks.
Morgan Stanley, JPMorgan, and Citi all declined to comment.
Investment bankers have also offered alternatives such as an IPO in the United States or a merger with a special purpose acquisition company, or SPAC, but such choices, according to two of the sources, are less plausible than a listing in India.
This year has seen a surge in India’s IT industry, with IPO fundraisings on course to set new records. Venture capital firms have also increased their investments in the nation, partly due to a Communist Party crackdown in China, which has made that market less welcoming.
Byju’s potential to become a worldwide
Byju’s was valued at $16.5 billion after obtaining around $150 million from UBS Group AG. According to market research company CB Insights, this puts it just ahead of the second-most valued startup in the country, digital payments service Paytm. Meanwhile, Paytm has filed the preliminary documents for what may be India’s largest IPO to date, valued at $2.2 billion.
Byju’s has the potential to become a worldwide leader in education technology, especially given Beijing’s recent policies that place significant limitations on comparable businesses in China. This has piqued the curiosity of investors, implying that the new goal valuation of $21 billion is within reach.
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