Byju’s Faces Insolvency Proceedings

Byju’s, once India’s most valuable startup, is on the brink of insolvency after the Board of Control for Cricket in India (BCCI) initiated proceedings at the National Company Law Tribunal (NCLT). The BCCI invoked Section 9 of the Insolvency and Bankruptcy Code (IBC) 2016, enabling creditors to assume control of the company.

The NCLT’s November 2023 decision affirmed Byju’s default on a Rs 158 crore installment to the BCCI. Thusly, Pankaj Srivastava was selected as the interval goal proficient, entrusted with dealing with Byju’s undertakings until the development of a Council of Loan bosses by the moneylenders.

The NCLT’s structure unequivocally settled the reason for starting Corporate Bankruptcy Goal Interaction (CIRP) against Byju’s because of the organization’s recognized defaults.

Internal Turmoil and Financial Distress

Byju’s has endured significant challenges over the past two years, marked by a funding crisis and a series of high-profile departures.Key chiefs, including CFO Ajay Goel, India President Arjun Mohan, and counselors Rajnish Kumar and T V Mohandas Pai, surrendered inside the previous year.

Investment firm Prosus, a long-term investor in Byju’s, recently wrote off its entire 9.6% stake in the company, reflecting a dramatic devaluation. This followed a $200 million rights issue at a valuation of $225 million, representing a 99% decline from its peak valuation of $22 billion.

The financial downturn has also impacted Byju’s founder, Raveendran, whose net worth plummeted to zero according to the Forbes Billionaire Index 2024.