The National Company Law Tribunal (NCLT) has halted the ongoing rights issue by Byju’s parent company, Think and Learn, which started on May 11. The Bengaluru bench of NCLT, in an order dated June 12, also instructed Byju’s to provide complete details of its shareholders before and after the equity allotments made on March 2 as part of the initial rights issue. This suspension will remain in effect until the main petition filed by investors is resolved.
A group of investors, including Prosus, General Atlantic, Sofina, and Peak XV, supported by other shareholders such as Tiger and Owl Ventures, approached the NCLT to challenge the company’s management and the rights issue. The tribunal ordered that the funds collected since the start of the second rights issue be kept in a separate account and not utilized until the main petition is disposed of. The investors claimed that Byju’s initiated a second rights issue after failing to raise the full $200 million from the first issue, which was announced in February at a significantly lower valuation than its peak enterprise value of $22 billion.
Byju’s has yet to respond to queries, but sources close to the company clarified that the ongoing rights issue is a continuation of the February rights issue, not a second tranche. They explained that some investors did not participate in the initial offering, so the issue was not fully subscribed, despite commitments for a $200 million subscription. The current rights issue allows existing shareholders to subscribe to the remaining portion on a super pro-rata basis.
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