Byju’s on Monday said it will a launch the initial public offering (IPO) of its test preparatory arm Aakash Education Services Ltd (AESL) by the middle of next year.

The edtech player said while its board has given its nod for the IPO, the appointment of the merchant bankers for the offering will be announced soon.

``The upcoming IPO will provide a significant capital infusion to bolster Aakash’s infrastructure, broaden its reach and extend high-quality test-prep education to a larger number of students across the nation,” the statement said.

Byju’s had acquired Aakash for about $950 million, or about Rs 7,100 crore, in April 2021.

Since the acquisition, Aakash has clocked a three-fold increase in revenue in the last two years.

The company added that AESL’s revenue is on track to reach Rs 4,000 crore with an EBITDA (earnings before interest, taxes, depreciation and amortisation) of Rs 900 crore in the fiscal year 2023-24.

According to Ken Research, test-prep market revenues are predicted to grow at a compounded annual growth rate (CAGR) of 9.3 per cent over 2020-2025, led by the online segment which is predicted to grow at a CAGR of 42.3 per cent over the same duration.

“Aakash is uniquely positioned to capitalise on this growth due to its comprehensive range of offerings that combine the best of classroom-based learning with cutting-edge digital products and services tailored for engineering and medical entrance exams,” Byju’s said.

Aakash has over 325 centres serving more than 4,00,000 students across the country.

The announcement came on a day Byju’s is reportedly planning to make a quarterly interest payment of $40 million.