Together With Byju's, We Are More Powerful And Has More Resources For The Students: Aakash Chaudhry, MD, Aakash Educational

The merger is the biggest news in the market during the pandemic, not just for start-up industry but for the whole market which is talking about the merger of Aakash Institute with Byju’s in the Edtech world. Was the talk going on for some time or was it an abrupt decision that took place during the pandemic based on the balance sheet and looking at the current situation with covid19 and lockdown.

Aakash Chaudhry: We were in talks since June 2020 and pandemic had no influence on this decision and in fact it’s the other way round. I think, when the Byju’s team reached out to us last year and the idea was to explore opportunity of tie-up and partnership, given that both the companies are very complementary in nature, for us, Aakash institute has been a physical education classroom coaching player and very focused on entrance exam especially Medical and JEE. Whereas, Byju’s has been focused on K-12 as a segment which is school education, school tuition and school help along with a very high focus on online education and digital education. 

So, I think, the idea of coming together was to put these two forces together and create something which is omni-channel, omni-present and way more powerful and has more resources at disposal for the benefit for the students. So, I think those were the ideas that were there, and it took us about 6-7 months before we could ink a proper formal understanding.

Aakash Institute made huge brand name since the past 33 years in the education space, not only in terms of providing quality test preparation education but also in terms of corporate governance, ethical standards you follow. You laid a foundation in Indian education space which were not there before. With the merger how do you look at your foundation and your values merging with Byju’s now?

JC Chaudhry: WE had initially talked to each other, we are staying on what basic principle we are running the institute and our top priority will be that all our basic principles are adhered to without any type of deviation, that the policy of keeping our student at number 1, discipline and commitments towards student or parents during admission, those things should be carried out, we see we also have the similar policies with myself being a teacher, I also follow these things. So, there is nothing to worry about the change of any policies, it will continue as it is.

So with merger, tell our viewers how it will add value who believe in Aakash-- their educational program and standards?

Aakash Chaudhry: So, in the last 3 decades what we have done is we have put together a very strong academic pedagogy and curriculum. We have created a fantastic system of education that can produce high performing outcomes for the students but as you are aware that physical education and centers has its own limitation and in the last 30 years we had a journey where we were able to open over 200 centers across India in about 130 cities, but with we coming together with Byju’s, we are actually joining a larger entity, which will not only enable us to take the 30-years of our experience and excellence to many more locations but will also enable us to piggy-back on digital or online education which Byju’s has really mastered in that will enable students to get education not only at their remote locations but also multiple channels which includes offiline, books, online and live-tutoring. 

I think with these two forces coming together, we will be able to take our academic excellence to absolutely the most remote corner of the land and collaborate with digital channels which are beyond the physical education reach and I believe this is the biggest advantage that we bring on the table and while we do this we also believe this is an integration that will also open up doors for lot of innovation in putting together new programs, integrating artificial intelligence, machine learning kind of initiatives that the technology at the arms of Byju’s are working, how we can enable students to get better on a day to day basis and take help of technology to improve themselves. I think these are some of the things that we really see benefitting students significantly.

You are a leader in a physical space and you just spoke about the new-innovation and new models have been talked about--the hybrid model. You even spoke about artificial intelligence. Did you have experience in these areas? How are you going to take it with Byju's? How are you going to integrate your program with some of the innovation you talked about, can you share please?

Aakash Chaudhry: Of course, we have been, apart from physical education, providing online digital education for the last seven to eight years ourselves and we started with pure play video lectures, we migrated quickly on live-tutoring lectures. But with the onslaught of pandemic last year what we were able to do is put together both the elements in a very synchronous manner where we started with giving video lectures to the students and live lectures to the students and then started allowing them to come to the nearest Akash center if they want to do a physical one-on-one interaction with the teachers. You know, this was a very wonderful, as they say, necessity is the mother of all inventions, so this was necessitated by the students and the parents, that you know, obviously they have been studying online but they wanted physical interaction. So, we were one of the few guys in the coaching segment who actually came forward and launched the hybrid programs. So, I think the success of the hybrid programs like these that we have done in the last one year in 2020, really gave us a confidence that if we were to do that at a larger scale with the Byju’s umbrella, I think we can help many more students not only reach out to them with a quality education but at a very optimal cost, because keeping large portion of education online and some portion of education physical really brings the cost down and we can pass on that advantage to the students.

Coming back to again the merger aspect, I would like to know that whilst you’re in talks with Byju’s from last year, but I see your turnover, I mean, right from Rs. 1,200 crore it has come down to Rs. 1,000 crore.  Did such falling revenue have something to do with merger?
 
Aakash Chaudhry: No, not at all, infact as you would appreciate that financial results come towards the end of the year and we had started discussion back in July 2020. So,  the idea at that time was how can we put these forces together and create 1 on 1, 11, and doing well or not doing well in finance was never a reason and always at the back of our mind, we’ve always believed that although it is a pandemic year and the pandemic continues in the second wave but eventually it has to go away and students will come back to the classroom and we will be back in our strength. So, finances were never a reason, infact, having said that FY 2020 had a Rs.1,200 crore revenue and FY 2021 will be closing Rs 1,000 crore plus, given the expanse and the hit of the pandemic, we’ve been able to control a lot of our business and not drop down significantly from what people would’ve expected or we would’ve anticipated in the beginning of the pandemic. So, we are fairly in a strong financial footing and as we speak, we have a full one year of experience behind us and we’re healthily building our FY 2022, for the coming year.

You founded something that is based on a traditional model of education, where the teacher interacts with the students, there’s lot of value into that, there’s lot of intimacy and there’s lot of knowledge which can be exchanged. You believed in that model and you successfully set up that.  Now transition is so huge in online space, how do you look at the scope of online education, do you think it can replace the whole physical space completely or how it can fill the void?

JC Chaudhry: You see I believed in the talk and chalk method in the beginning itself, the personal touch has no substitute but with the passage of time and the advancement of the technology, we could reach to the farthest places only by technology not by physical teaching. In the villages, in the smaller areas, it is not possible to open the class centers because the faculty availability would be very poor over there. They may not like to go in villages and students may not afford the fees that we are charging from the students. So, online system will be comparatively cheaper and the same teacher who is teaching in offline mode at the center, the same teacher will be teaching in online mode also. So, quality of education is same whether it is offline or online. Only thing is that the students are in the habit of talking to the teacher and asking doubts in routine for the last so many years, so it is a slight jerk to them but when the pandemic is going on and for the last one and a half year time, the students are confined to their homes, so, they are now gradually shifting their liking and minds to online because there is no other alternative because schools are closed, coaching center closed, what they will do? They must ultimately study, so sooner or later they’ll shift to online, but it’ll not be 100%, because students may not like it 100%. If simultaneously, once a week or twice a week they are called for doubt classes, then it will be a combination of offline and online both, the hybrid model is going to be successful and the need of the day also.

Apart from seeing this educational space as a commercial viability, you’re also very compassionate about education. How do you ensure such values which you created will pass on to Byju with such merger?

JC Chaudhry: We conduct all India tests for all interested students who take admission, any student who is poorest of poor, we consider and give 100% scholarship, so facilities over there. Only thing was that I used to teach 50 students free from the government school, 25 for medical, 25 for IIT for the last 15 years, same we will continue here also. It is not a very big number, 50 students, and they’ve got it free also, if they’re studying in a government school, they’re poor children, there’s no problem in that.

So, how do you define, as I said, the very fact of education lies in interacting with the students right there with you and there is real power of traditional education. Coming back to this hybrid mode, what difference do you see in future? How will it shape if you can define it broadly?

Aakash Chaudhry: I think quality education has always been tied up with physical education infrastructure for a long time and it has also been tied up with metro cities and state capitals. I think what digital education and online education can do is totally, honestly, and truly democratize the whole reach of education. Now a student siting in a tier-4 town can continue to get high quality education from the nearest Akash teacher in an online mode and on a fortnightly basis or a weekly basis can actually travel two-three hours and get the doubts cleared. So, I think what hybrid education and online education can do is really take the quality education to the remotest corner and we see it not only in education but also in medical services, you know, telemedicine is an example, the doctor can’t reach but they can really consult you and give you the benefit over the phone call, and I think, what the new methods of education will do is people who were not even considering preparing for an entrance exam because they didn’t have a great teacher in their city or town or district or didn’t have a system in their city or town or district, now they’ll start thinking that I don’t have to go there every day, I have to do absolutely online, and with the advent of broadband and internet penetrating deeply into the remote locations, so, this has now become a reality where you will see far more number of students participating in these entrance exams with a far more level of preparation than it has been happening in the past. I think, like, we’ve experienced hybrid education and now we feel that hybrid education should become an eminent part of our offering going forward, even if the pandemic goes away, we feel that those students who were never ever thinking of coming to our physical Akash center which was two hours-three hours away on a day-to-day basis, now they can think about it, because five days they can study online from the comfort of their home and one day or two days in a week they can actually travel down and get their doubts and test papers resolved. So, I think this has opened a new channel for students and actually exposed the market that online education works and as an example, last year 2020, all our students gave the entrance exam at the behest of online education and hybrid education, and I’m happy to tell you that in JEE itself, in Advance our student got All India Rank 1 and in NEET also the student got 720/720, which is the highest score ever achieved, so, the effectiveness and the outcome is also being promised and delivered on online and that really is now giving the confidence to the tier-3 and tier-4 town kids, that even if get education from a branded and a trusted player, we can expect a good outcome for us at the end of the day. I think this a big promise which was never there for people to see and experience.

Then based on such model, new and evolving model, how do you look at it in terms of scope and scale. Could you separately define your target, your scaled up program with Byju's now and how it’s going to unfold?

Aakash Chaudhry: So, scale up classroom physical centers will continue to be expanded and added, as part of our offering we will continue to add about 20-25 classroom centers every year. There are still so many locations where it is very much possible for us to go out there, set up a center, identify talented teachers and post them there so that they can deliver education on the ground, but while we do that, we will also continue to explore some more remote location which will become a hub-and-spoke kind of a model where the students will get an education on a weekly, fortnightly basis from the hub but as a spoke they will continue to get online education on day-today basis. So, as part of our expansion program with Byju's we’ll continue to add our physical classroom centers, so, in next two-three years we are hoping a combination of physical classroom and these hub-and-spoke extension centers, about a 100 of them to be added, so that we can continue to have a physical footprint and add access of our program with the help of hybrid education to more locations.

While it was speculated initially, pandemic to be a one-off instance and things will come back to normal, now it is a frequent phenomenon. The lockdown has again hit the coaching institutes very hard. Government has also not come up with a policy, incentive and initiative. This sector is heavily hit.  What is the support you want from the government and could you talk about that?
 

Aakash Chaudhry: I think what the government can do is ensure that the centers become functional and operational, right kind of protocols, health protocols and safety protocols, are given to all coaching institutes so that they can administer that and allow physical classroom or at least once in a week, twice in a week student interaction. So, I think what we need to have from the government is to allow safer protocols, government to not restrict use of vaccines to a certain age, infact if all the students, teachers, everybody is inoculated, then there will not be or maybe probably a very low fear of reaching out to physical centers for education. 

So, I think some of the important things that the government should look at is help enable protocols and provide access to vaccination for the education, coaching community because coaching is an integral part of the Indian education system today because of its function, because of its objective. I mean, school has a role to play for academics, social, overall personality development, cultural and everything, whereas our role is very focused on entrance exam and academic rigor. So, I think there is a well-defined role and a there is a very well-defined need in the market that we serve and to the function of our serving that market, we have our daily interaction need with the students and to ensure that they are safe, the right protocols and the vaccination access to the education community, be it teachers, be it students, must be provided.

Akash has been a pioneer in many ways. Have you thought of something else which you’d like to venture in this space which has not been explored yet a new dimension in education set-up? Would you like to share ?

Aakash Chaudhry: Absolutely! We are putting our minds together, so we have put together an integration team that can not only integrate the two businesses but also put together a full road map for next five years like what all programs, products and services that we should come out with that can enable students and their performance. As of now, all of that is under discussion and we are pretty hopeful that once we fight off the current crisis of the pandemic and come back to normal running of our business and our institute. we will be definitely coming out with lot more innovation as a joint and combined entity than we would’ve seen in last five-ten years.