Prosus Writes Off Entire Byju’s Investment Worth Rs. 4000 Crore, Values It At Zero

Even as Byju’s is battling customers, regulators and its own board, some of its investors seem to be giving up on the company.

Dutch investment firm Prosus has written off its entire Byju’s investment to zero. Prosus is one of Byju’s largest investors, and holds a 9.6 percent stake in the company. It has however now valued the stake, once worth $493 million (Rs. 4,000 crore), at zero.

In its annual report, Prosus said that the group wrote off the fair value of its stake due to “significant decrease in value for equity investors.” “A fair value loss of $493 million was recognised in other comprehensive income in the current year,” it added.

Prosus’s write off of Byju’s comes months after HSBC had estimated the value of Prosus’s stake in the company to be zero. “We assign zero value to Byju’s stake amid multiple legal cases and funding crunch,” HSBC said in a note on May 21. “Previously, we valued around 10% stake in Byju’s by applying (an) 80% discount to the latest publicly disclosed valuation,” it added.

Earlier this year, Byju’s had itself implied a 99 percent fall in its valuation when it had launched a rights issue to raise funds at a valuation of just $225 million, which was 99 percent lower than the valuation of $22 billion that the company had commanded just a few years prior. The rights issue had gone through, despite fierce opposition from Byju’s key investors. Byju’s had then launched a second rights issue, but NCLT had stopped Byju’s from proceeding with it. The matter is due for hearing this week.

A complete write off by Prosus, though, indicates that the investment firm finds it unlikely that Byju’s will be able stage a turnaround of its fortunes going forward. Prosus’s write off follows fellow investor Blackrock valuing the company at just $1 billion, down 95 percent from its peak in January this year. And with the company continuing to be embroiled in legal battles with its own investors, it may find it hard to salvage any value from its rapidly-crumbling operations.