For Prosus, Byju's is worth Zero, firm cites decline in value for mark down

Prosus has written off the worth of its 9.6% stake in Byju’s to zero. The investment firm cited the decline in value for equity investors as the primary reason for this decision.

In its annual report, Prosus stated, "We have impaired Byju's to zero at the end of FY24 due to inadequate information on the company’s financial health, liabilities, and future outlook."

Prosus' investment in Byju's now reflects an internal rate of return (IRR) of minus 100 percent. The IRR, a key indicator of investment profitability, turns negative when the anticipated cash flows fall short of the initial outlay. In its Dutch stock exchange filing, Prosus disclosed a fair value loss of $493 million. The firm has poured about $500 million into Byju's over the years, alongside significant stakes in other Indian ventures like Swiggy, Meesho, and Eruditus.

Byju’s has faced multiple valuation markdowns from its early backers, including Prosus. Recently, HSBC also valued Prosus’ nearly 10% stake in Byju’s at zero.

This development follows Byju’s raising $200 million through a rights issue, valuing the company at $225 million, a significant drop from its peak valuation of $22 billion.

The drastic drop in Byju's valuation has also affected founder Byju Raveendran’s net worth, reducing it to zero according to the Forbes Billionaire Index 2024. Previously, his net worth was approximately $2.1 billion.