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BENGALURU : Byju’s has raised $1.2 billion in debt, more than double its previous target, two people aware of the matter said, as India’s most valuable startup prepares a war chest for more acquisitions and for working capital ahead of a potential public listing next year.

The borrowing plan through a Term Loan B (TLB) was approved by the board of Think and Learn Pvt. Ltd, which runs Byju’s, one of the two people said. Both spoke on condition of anonymity.

The Bengaluru-based edtech firm earlier planned to raise $500 million through a TLB in the US, Mint first reported on 26 October. TLBs typically have a floating interest rate, with tenures ranging from five to seven years.

Institutional investors such as hedge funds, which seek higher yields and sustain longer investment horizons than traditional banks, offer such loans that are similar in characteristic to high-yield bonds.

A large part of the principal and accrued interest are to be paid on maturity, making such loans attractive for young, fast-growing companies with high cash burns and weak cash flows to support quarterly interest payments as required in bank borrowings.

Byju’s is expected to use the funds primarily to fuel its acquisition drive. It would also deploy a portion of the funds for its working capital requirements.

A spokesperson for Byju’s declined to comment.

Bloomberg first reported on Monday on Byju’s raising the target size for the TLB. The company is in talks with Blackstone, Fidelity and GIC for the term loan, according to the report.

Byju’s fundraising plan comes at a time when the company is actively deliberating both US and India for its potential public listing next year.

Meanwhile, Byju’s has been ramping up its acquisition strategy this year in a bid to enter newer edtech categories of upskilling, test prep and higher learning, while fortifying its presence across key geographies including the US.

This year alone, the company has made nine acquisitions, spending close to $2.5 billion to acquire various edtech businesses. It spent close to $950 million to buy Aakash Educational Services Ltd in April, in what is touted to be one of the most expensive acquisitions in the Indian edtech space. Byju’s also shelled out close to $600 million to acquire Great Learning, marking its entry into the upskilling space. Earlier this year, Byju’s acquired kids reading platform, Epic and code-learning site Tynker to bolster its US foray.

American investment banks including Morgan Stanley and JP Morgan have worked with Byju’s to structure the TLB.

“The historic success of Byju’s TLB, as the largest unrated TLB from India and Asia as well as one of the largest unrated TLB globally in history, reflects the strong credit story of the company as one of the largest and fastest growth global edtech platforms with comprehensive suite of products for multiple age groups, many strong brands, differentiated immersive content to make children fall in love with learning," Kamal Yadav, managing director, Morgan Stanley, said in a statement.

Byju’s isn’t the first Indian startup to opt for the TLB route for fundraising. In July, hospitality unicorn Oyo Hotels and Homes Ltd raised debt funding worth $660 million from global institutional investors. According to Oyo, the proposed issuance was subscribed 1.7 times as it received commitments of close to $1 billion from leading institutional investors. Byju’s has more than 100 million registered students and 6.5 million paid subscribers.

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