Byju’s Bankruptcy Saga: A Game of High Stakes and Power Plays
April 19, 2025, 5:39 am
Location: India, Maharashtra, Mumbai
Employees: 10001+
Founded date: 2007
Total raised: $96.18M
The saga of Byju’s, once a shining star in India’s edtech landscape, has taken a dark turn. The National Company Law Appellate Tribunal (NCLAT) recently dealt a significant blow to the company, granting creditors the final say on a crucial ₹158 crore settlement with the Board of Control for Cricket in India (BCCI). This decision effectively sidelines the company’s suspended director, Riju Raveendran, and his brother, founder Byju Raveendran, from the decision-making process. The ruling underscores the shifting power dynamics in the world of corporate insolvency, where creditors now hold the reins.
Byju’s rise was meteoric. Founded in 2011, it quickly became India’s most valuable edtech startup, attracting global investors and achieving unicorn status. However, the company’s aggressive expansion strategy led to financial distress. The cracks began to show when Byju’s defaulted on a ₹158 crore payment to BCCI, triggering insolvency proceedings. The once-celebrated startup now finds itself in a precarious position, battling creditors and regulatory scrutiny.
The NCLAT’s ruling came after Riju Raveendran sought to challenge a previous order from the Bengaluru bench of the National Company Law Tribunal (NCLT). This order had directed BCCI to present the settlement proposal to the committee of creditors (CoC) for approval. The NCLAT upheld this directive, emphasizing that the CoC, already constituted at the time of the settlement offer, has the jurisdiction to accept or reject it. This ruling effectively removes the Raveendran brothers from the equation, placing the fate of the settlement squarely in the hands of the creditors.
The committee of creditors is dominated by Glas Trust LLC, which holds a staggering 99.41% voting share based on its claim of ₹11,432 crore. This overwhelming majority gives Glas Trust significant leverage over the settlement process. Aditya Birla Finance and Incred Financial Services Ltd hold minor stakes, but their influence is negligible compared to Glas Trust. The dynamics of this creditor landscape reveal a stark reality: the Raveendran brothers are now at the mercy of their creditors.
Glas Trust has voiced strong opposition to the settlement, labeling the funds intended for BCCI as “tainted.” They argue that these funds should be directed towards settling debts with creditors first. This position complicates the Raveendran brothers’ efforts to negotiate a way out of insolvency. Convincing Glas Trust to reverse its stance will be a formidable challenge, akin to turning a battleship in a narrow canal.
The Raveendran brothers do have a potential lifeline. They can appeal to the Supreme Court, seeking to regain control over the settlement decision-making process. However, this move is fraught with uncertainty. The Supreme Court’s previous intervention in the case has already demonstrated a willingness to uphold creditor rights over the interests of the promoters. The brothers’ options are dwindling, and time is not on their side.
The timeline of events leading to this crisis is a cautionary tale. Byju’s entered into a jersey sponsorship agreement with BCCI in 2019, extending it until November 2023. However, the company’s failure to meet its financial obligations led to the initiation of insolvency proceedings in June 2024. The subsequent attempts to negotiate a settlement have been met with resistance from creditors, highlighting the fragile nature of corporate negotiations in times of distress.
As Byju’s grapples with its financial woes, the broader edtech landscape is also feeling the tremors. Investors, once eager to pour money into startups, are now exercising caution. The fallout from Byju’s struggles has created a ripple effect, causing other edtech companies to reconsider their growth strategies and funding approaches. The once-booming sector is now navigating a stormy sea of uncertainty.
The implications of Byju’s bankruptcy extend beyond the company itself. They raise questions about the sustainability of aggressive growth strategies in the startup ecosystem. The edtech sector, once viewed as a goldmine, is now under scrutiny. Investors are reassessing their risk appetites, and startups are feeling the pressure to demonstrate profitability rather than growth at all costs.
In conclusion, Byju’s bankruptcy saga is a stark reminder of the volatility inherent in the startup world. The NCLAT’s ruling has shifted the balance of power, placing creditors in the driver’s seat. The Raveendran brothers face an uphill battle to regain control over their company’s fate. As the edtech landscape evolves, the lessons learned from Byju’s fall from grace will resonate throughout the industry. The stakes are high, and the outcome remains uncertain. The game is far from over.
Byju’s rise was meteoric. Founded in 2011, it quickly became India’s most valuable edtech startup, attracting global investors and achieving unicorn status. However, the company’s aggressive expansion strategy led to financial distress. The cracks began to show when Byju’s defaulted on a ₹158 crore payment to BCCI, triggering insolvency proceedings. The once-celebrated startup now finds itself in a precarious position, battling creditors and regulatory scrutiny.
The NCLAT’s ruling came after Riju Raveendran sought to challenge a previous order from the Bengaluru bench of the National Company Law Tribunal (NCLT). This order had directed BCCI to present the settlement proposal to the committee of creditors (CoC) for approval. The NCLAT upheld this directive, emphasizing that the CoC, already constituted at the time of the settlement offer, has the jurisdiction to accept or reject it. This ruling effectively removes the Raveendran brothers from the equation, placing the fate of the settlement squarely in the hands of the creditors.
The committee of creditors is dominated by Glas Trust LLC, which holds a staggering 99.41% voting share based on its claim of ₹11,432 crore. This overwhelming majority gives Glas Trust significant leverage over the settlement process. Aditya Birla Finance and Incred Financial Services Ltd hold minor stakes, but their influence is negligible compared to Glas Trust. The dynamics of this creditor landscape reveal a stark reality: the Raveendran brothers are now at the mercy of their creditors.
Glas Trust has voiced strong opposition to the settlement, labeling the funds intended for BCCI as “tainted.” They argue that these funds should be directed towards settling debts with creditors first. This position complicates the Raveendran brothers’ efforts to negotiate a way out of insolvency. Convincing Glas Trust to reverse its stance will be a formidable challenge, akin to turning a battleship in a narrow canal.
The Raveendran brothers do have a potential lifeline. They can appeal to the Supreme Court, seeking to regain control over the settlement decision-making process. However, this move is fraught with uncertainty. The Supreme Court’s previous intervention in the case has already demonstrated a willingness to uphold creditor rights over the interests of the promoters. The brothers’ options are dwindling, and time is not on their side.
The timeline of events leading to this crisis is a cautionary tale. Byju’s entered into a jersey sponsorship agreement with BCCI in 2019, extending it until November 2023. However, the company’s failure to meet its financial obligations led to the initiation of insolvency proceedings in June 2024. The subsequent attempts to negotiate a settlement have been met with resistance from creditors, highlighting the fragile nature of corporate negotiations in times of distress.
As Byju’s grapples with its financial woes, the broader edtech landscape is also feeling the tremors. Investors, once eager to pour money into startups, are now exercising caution. The fallout from Byju’s struggles has created a ripple effect, causing other edtech companies to reconsider their growth strategies and funding approaches. The once-booming sector is now navigating a stormy sea of uncertainty.
The implications of Byju’s bankruptcy extend beyond the company itself. They raise questions about the sustainability of aggressive growth strategies in the startup ecosystem. The edtech sector, once viewed as a goldmine, is now under scrutiny. Investors are reassessing their risk appetites, and startups are feeling the pressure to demonstrate profitability rather than growth at all costs.
In conclusion, Byju’s bankruptcy saga is a stark reminder of the volatility inherent in the startup world. The NCLAT’s ruling has shifted the balance of power, placing creditors in the driver’s seat. The Raveendran brothers face an uphill battle to regain control over their company’s fate. As the edtech landscape evolves, the lessons learned from Byju’s fall from grace will resonate throughout the industry. The stakes are high, and the outcome remains uncertain. The game is far from over.