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Tactical Restructuring of Byju's: A Thought Towards Better Education

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 billions.

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.

Introduction
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 [1]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 Aakash:
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) services.

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. [2]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 competitive/comparative advantage:
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.

Large size:
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.

New Technology:
Byju's adapted new ways of learning through online mode with better use of technology, making online learning as fruitful as that of offline.

Strong brand:
Strategize marketing along with customer satisfying services makes it count as a strong brand.

Domination:
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.

Diversification:
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.

Merger:
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.

Strategic alliance:
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'.

Acquisition:
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?
Employee Uncertainty
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.[3]

Investor Reactions
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 Capital.[4]

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.[5]

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.

Conclusion
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.

Byju's now 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.

End-Notes:
  1. Manish Singh, Byju's acquires Indian tutor Akash for nearly $1 billion, (April. 5, 2021), https://techcrunch.com/2021/04/05/byjus-acquires-indian-tutor-aakash-for-nearly-1-billion/
  2. Available at: https://byjus.com/our-investors/
  3. 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
  4. New investors value Byju's at $11 billion, Hindustan Times, (Sep. 24, 2020, 01:07 AM IST), https://www.hindustantimes.com/business-news/new-investors-value-byju-s-at-11-billion/story-LGeMvzUCGRasNQ0VevqumM.html
  5. 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/
Written By:
  1. Yamya Pandey - Bharti Vidyapeeth Deemed University, New Law College, Pune.
  2. Pravar Agrawal - Bharti Vidyapeeth Deemed University, New Law College, Pune.

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