Byju's core business revenue at 3,569 crore, posts operating loss of Rs 2,253 crore in FY22

It is important to note that Byju's has only announced partial or incomplete FY22 financials as it only reflects its core operations, even after a delay of almost a year.  In the statement, Byju's did not share its net loss and only published its EBITDA losses from core operation in FY22. The company said it plans the consolidated numbers with the ministry of corporate affairs in the next three weeks.

The company also said that the audit report submitted by its statutory auditors BDO, is clean and unqualified.

“The takeaways from a uniquely belligerent year, which included nine acquisitions, are lifelong learnings. The core business has demonstrated good growth, underlining the potential of edtech in India, the fastest-growing major economy. I am also humbled by the lessons learnt in the post-pandemic world of readjustments. Byju's will continue on the path of sustainable and profitable growth in the coming years," said founder and group CEO Byju Raveendran.

Delay in results

Previously, Byju’s management had agreed with its investors that the company would be putting out FY22 results by the end of September and FY23 results by the end of December.

Byju’s, which did not have a full time Chief Financial Officer for almost two years, had delayed their FY21 results also by almost 18 months. The company roped in Ajay Goel, a former Vedanta executive in April as its CFO.

However, Goel quit barely six months after joining the edtech firm and headed back to his previous company Vedanta on October 24.

In June, Deloitte, Byju’s long-standing auditor, which flagged concerns with the company’s revenue recognition methods for its accounts in FY21, also resigned citing delay in producing FY22 results. The company, touted as India’s most-valued startup, onboarded BDO then.

The company said it plans the consolidated numbers with the ministry of corporate affairs in the next three weeks.

Although the FY22 results come after a delay of nearly 19 months, depicting a snapshot from nearly two years ago, they hold immense importance. During FY22, which marked the second year of the pandemic and was a shot in the arm for India’s edtech sector, Byju's acquired at least eight major companies both in India and abroad while securing over $3 billion in equity and debt.

Byju's concluded FY22 on a positive note by finalising a substantial $800 million funding round at a valuation of $22 billion, establishing itself as the most valuable startup in the country. However, since then, a series of controversies have unfolded.

It all commenced with Byju’s long-standing auditor Deloitte declining to sign off on its FY21 (2020-21) results which led to an over 18-month delay in releasing the results. It was followed by extensive media reports of alleged mis-selling and unstructured sacking of tens of thousands of employees.

In FY23, the situation further deteriorated significantly as senior management and the company's board of directors resigned abruptly, exacerbating the challenges facing the company.

Scrutiny on Byju’s

The company attracted the scrutiny of various ministries and government bodies, including India's financial probe agency, the Enforcement Directorate, and the Employees Provident Fund Organisation (EPFO).

Not just on the domestic front, Byju’s also encountered difficulties in managing its $1.2 billion term loan B with international creditors. These creditors accelerated the repayment schedule late last year due to technical defaults on the loan. Providing monthly business updates to creditors was one of the terms of the loan, which Byju’s failed to comply with, media reports said.

In September this year, after months of negotiations with lenders, Byju's proposed to repay the entire $1.2 billion loan within six months, with an initial payment of $300 million within three months. Byju's put two of its key assets, the upskilling platform Great Learning and the US-based book reading platform Epic, up for sale, with expectations of generating approximately $800 million from the sale.

Earlier this week, lenders, who hold a 60 percent claim on Great Learning, appointed the risk advisory firm Kroll to protect the company's assets, particularly in the event of a management buyout.

Additionally, Byju's has been in negotiations with Davidson Kempner, a US-based investment firm that committed about $250 million in structured instruments linked to future cash flows from Byju's largest asset, Aakash Educational Services.

However, Byju's had a technical default even on the Davidson Kempner loan, prompting the US-based investor to seek control of Aakash. The investment firm also withheld a significant portion of the amount, and Byju's was only able to raise about $100 million.

Byju's is currently in discussions with Ranjan Pai, one of the company's earliest investors, to raise funds for repaying the debt to Davidson Kempner, along with interest. As reported by the Economic Times on October 12, Pai may consider an investment of approximately $250-300 million in Aakash, with an initial infusion of $170 million to be used for repaying Davidson Kempner.