In a testament to resilience, edtech giant Byju’s has successfully subscribed its $200 million rights issue, showcasing determination in the face of ongoing challenges, including a fresh insolvency plea from US-based Glas Trust Company.
Despite the insolvency cloud hanging over the company, the rights issue was fully subscribed, indicating investor confidence in Byju’s ability to navigate turbulent waters. The move comes as the company grapples with a growing divide between its leadership and some major investors.
Founder and CEO Byju Raveendran, in a bid to foster unity, has called on all shareholders to actively participate in the rights issue. Emphasizing the collective effort in building the company, Raveendran seeks to rally support amid increasing tensions.
However, the Prosus-led investor group, which has openly advocated for Raveendran’s removal, has yet to show interest in the rights issue. This non-participation poses a risk of potential equity loss for the group.
Byju’s, currently valued at $22 billion, aims to raise $200 million through the rights issue, offering a pre-money valuation of $20-25 million. The company, despite the successful completion of the rights issue, faces headwinds from a faction of investors pushing for leadership changes.
An extraordinary general meeting (EGM) looms on the horizon, and Byju’s has sought legal recourse to counter resolutions aimed at removing Raveendran. This legal maneuver underscores the intensity of the internal strife, impacting the company’s IPO plans and raising concerns among the investing community.
The developments at Byju’s serve as a reflection of recent governance and financial struggles, leading to a reevaluation of its IPO trajectory. Despite the challenges, Raveendran remains steadfast in his optimism, pointing to the enduring brand strength and the untapped potential for future growth.
