ED probe may delay Byju's fundraise plan

May also hit IPO of subsidiary Aakash

- SALMAN SH & SAMEER RANJAN BAKSHI

THE ENFORCEMENT DIRECTORATE'S (ED's) investigation into edtech firm Byju's for alleged violation of Foreign Exchange Management Act (Fema) is likely to impact the company's fundraising plans and the initial public offering (IPO) of its subsidiary, Aakash Educational Services.

Analysts FE spoke to said it is quite likely that investors will seek explanations from the company with regard to the investigation and may even withdraw any commitment made by them.

Byju's is currently in the process of raising $700 million, including from international investors. It is also mulling a ₹8,000-crore IPO for its subsidiary, Aakash Educational Services, which was acquired by edtech major for $1 billion in 2021.

Tushar Agarwal, advocate, Supreme Court, said any further actions by ED after this search may certainly affect the fundraising plans of Byju's because such developments affect the public perception of the company.

"If ED after investigation, finds that any Indian resident or entity has acquired, held, owned, possessed or transferred the foreign exchange, foreign security or any immovable property in contravention to the Section 4 of Fema, ED can seize the, value equivalent, of such foreign exchange, foreign security or immovable property which is situated in India,"Agarwal said.