Byju’s Faces Insolvency Proceedings Following BCCI’s Petition
New Delhi, 16th July 2024: Byju’s, once considered the most valuable Indian startup, is now facing insolvency proceedings at the National Company Law Tribunal (NCLT) following a petition filed by the Board of Control for Cricket in India (BCCI).
The BCCI invoked Section 9 of the Insolvency and Bankruptcy Code (IBC) 2016, which empowers creditors to take control of a company from its current management. In November 2023, the NCLT issued an order stating that Byju had defaulted on a payment of Rs 158 crore.
Pankaj Srivastava has been appointed as the interim resolution professional by the NCLT. He will oversee Byju’s operations until a Committee of Creditors is formed.
“The Interim Resolution Professional will establish a Committee of Creditors after compiling all claims against Think and Learn Pvt Ltd, the Corporate Debtor, and assessing its financial standing,” the order stated.
The NCLT order affirms that BCCI’s petition for a Corporate Insolvency Resolution Process (CIRP) against Byju is justified due to established defaults by the Bengaluru-based edtech company.
Byju has been grappling with challenges over the past few years, including financial difficulties and significant leadership changes. In the past 12 months alone, the company experienced a funding crunch and witnessed departures at the executive and board levels. In October 2023, Chief Financial Officer Ajay Goel resigned, followed by India CEO Arjun Mohan in April this year. Advisors Rajnish Kumar and T V Mohandas Pai also departed in July.
Recently, investment firm Prosus, which had invested approximately $500 million in Byju, wrote off the value of its 9.6% stake in the company. This decision came shortly after Byju conducted a $200 million rights issue, valuing the company at $225 million—a stark contrast to its peak valuation of $22 billion.
Notably, Byju’s founder Raveendran’s net worth has plummeted to zero, according to the Forbes Billionaire Index 2024.
