The National Company Law Appellate Tribunal (NCLAT) has ordered the National Company Law Tribunal (NCLT) to decide on the settlement between BYJU’S and the Board of Control for Cricket in India (BCCI) within seven days. The issue stems from a ₹158 crore default by BYJU’S, which led to insolvency proceedings initiated by BCCI. The Supreme Court had previously set aside a settlement between BYJU’S and BCCI, directing that the funds be held in an escrow account.
Additionally, BYJU’s largest shareholder, Riju Raveendran, challenged an NCLT ruling that reinstated Glas Trust and Aditya Birla Finance as creditors, despite US lenders holding a 99.41% voting share. NCLAT has now disposed of Raveendran’s appeal and directed NCLT to decide on BCCI’s withdrawal plea. Meanwhile, US lenders have opposed the settlement, citing outstanding unpaid dues of ₹11,432 crore and alleging financial mismanagement. The upcoming NCLT ruling will determine whether BYJU’s insolvency proceedings continue or are dismissed.
1. Introduction to BYJU’S: The Rise of India’s EdTech Giant
BYJU’S, founded in 2011 by Byju Raveendran, is one of India’s most prominent EdTech startups. Operating under Think & Learn Pvt Ltd, the company offers online learning programs for students across various age groups, leveraging technology-driven education solutions. Its primary revenue model includes:
BYJU’S follows a diverse monetization strategy to sustain its position as a leading edtech platform. The company operates on a subscription-based model, where users pay for access to online courses and study materials, ensuring a steady revenue stream. Additionally, BYJU’S engages in B2B partnerships, collaborating with schools and educational institutions to provide digital learning tools, thereby expanding its reach in the academic sector. The platform also adopts a freemium model, offering basic content for free while keeping premium courses behind a paywall to attract and convert users into paying subscribers. Furthermore, BYJU’S has focused on acquisitions and expansion, strengthening its global presence by acquiring platforms like WhiteHat Jr, Aakash Educational Services, and Epic. These strategic acquisitions have enabled the company to diversify its offerings and enhance its market influence in the edtech industry.
With significant funding from investors like Sequoia Capital, General Atlantic, and Prosus, BYJU’S reached a valuation of over $22 billion at its peak. However, recent financial distress has resulted in debt issues, investor scrutiny, and now, insolvency proceedings.
2. The Insolvency Case: Key Developments
2.1 Why Did BCCI File an Insolvency Petition?
The BCCI initiated insolvency proceedings against BYJU’S after the company defaulted on ₹158 crore in payments related to sponsorship agreements. This led to the National Company Law Tribunal (NCLT) admitting BCCI’s insolvency plea in July 2024.
2.2 Supreme Court’s Intervention
In October 2024, the Supreme Court set aside a previous ₹158 crore settlement between BYJU’S and BCCI, as it was funded personally by Riju Raveendran rather than BYJU’S itself. The court directed that these funds be placed in an escrow account, pending further legal proceedings.
2.3 NCLT and NCLAT Rulings
On January 29, 2025, the National Company Law Tribunal (NCLT) Bengaluru reinstated Glas Trust and Aditya Birla Finance as lenders while removing the Resolution Professional (RP) due to allegations of misconduct. Following this, on February 7, 2025, the National Company Law Appellate Tribunal (NCLAT) Chennai directed the NCLT to expedite its decision on the Board of Control for Cricket in India (BCCI)’s settlement plea within seven days. Additionally, the NCLAT dismissed Riju Raveendran’s challenge against the reinstatement of Glas Trust and Aditya Birla Finance, reaffirming their position in the ongoing legal proceedings.
3. The Role of US Lenders and Their Opposition
US-based lenders, who hold a 99.41% voting share in the Committee of Creditors (CoC), have strongly opposed the settlement between BYJU’S and BCCI. Their key concerns include:
Lenders have raised concerns over BYJU’S unpaid dues amounting to ₹11,432 crore, asserting that the company’s outstanding debt extends beyond the BCCI dispute. Additionally, US lenders have accused BYJU’S of fund siphoning, alleging that the funds used for the BCCI settlement were misappropriated from their loans. The recent NCLT ruling, which reinstated Glas Trust and Aditya Birla Finance, has also led to a reconstitution of the Committee of Creditors (CoC), shifting the balance of power within the group. With the reconstituted CoC now including these reinstated lenders, discussions will continue regarding the appointment of a new Resolution Professional (RP) to oversee the ongoing proceedings.
4. Possible Outcomes of the NCLT Decision
With the NCLAT directing the NCLT to decide within a week, several potential scenarios may unfold. If the NCLT approves the BCCI settlement and permits the withdrawal of insolvency proceedings, BYJU’S could avoid immediate bankruptcy. However, US lenders might challenge this decision in higher courts, prolonging the legal battle. On the other hand, if the NCLT rejects the settlement, citing merit in the lenders’ claims, the insolvency proceedings would continue. This could lead to further legal disputes and a potential restructuring of BYJU’S operations, impacting its future course.
5. Industry Insights: What This Means for the EdTech Sector
The case underscores the risks investors face when backing high-growth, debt-laden startups, raising concerns about financial stability and long-term viability. It also brings regulatory oversight into focus, emphasizing the need for greater scrutiny on corporate governance and financial transparency in the startup ecosystem. Additionally, the crisis highlights the importance of sustainability in the EdTech sector, as declining funding forces companies to adopt more stable revenue models to ensure long-term survival and avoid similar financial distress.
6. Learning for Startups and Entrepreneurs
To ensure long-term stability, companies must prioritize financial prudence and debt management by avoiding excessive reliance on borrowed capital and maintaining a sustainable cash flow. Implementing strong corporate governance with transparent financial disclosures can help prevent legal disputes and reinforce investor confidence. Additionally, risk mitigation strategies, such as diversifying revenue streams, are essential to safeguard business continuity during financial downturns and unforeseen crises.
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