Byju’s, an online learning platform, borrowed INR 3 billion (~USD 36.45 million) from its subsidiary Aakash Educational Services for the principal activities of its Think & Learn platform.

Aakash’s board of directors, subject to the approval of general meeting members, approved an unsecured loan to Byju’s Think & Learn platform at an interest rate of 7.5% per annum.

Byju’s reported that a subsidiary or parent company can give or receive loans only for “principal business activities.” In this instance, the loan from Aakash is, in effect, an advance for the marketing campaigns (“principal business activity”) conducted by Byju’s on its behalf. Byju’s stated that it purchases advertising spots in bulk to market its portfolio of companies and benefits from economies of scale.  

Analyst QuickTake: Byju’s acquired Aakash Educational Services, an operator of physical coaching centers, in April 2021 and was reportedly one of the largest acquisitions in the EdTech space. According to reports, the company paid nearly USD 1 billion, comprising USD 600 million in cash and the rest in equity.