BYJU’S Secures 50% Vote on Rights Issue: Key Shareholders Invited to Prevent Dilution

BYJU’S, led by its Founder and CEO Byju Raveendran, finds itself embroiled in a shareholder dispute as it seeks to increase its authorized share capital for a $200 million rights issue. Raveendran has made efforts to address concerns and prevent dilution of ownership stakes.

BYJU’S Secures Majority Votes: 

Raveendran informs investors that BYJU’S has received over 50% votes in favor of increasing the authorized share capital. This move is seen as crucial for the success of the rights issue and the future trajectory of the edtech firm.

Invitation to Key Shareholders: 

In an email to shareholders, Raveendran extends an invitation to “valued existing shareholders” to participate in the rights issue, emphasizing the importance of safeguarding their ownership stakes from dilution.

Consideration for Renounced Shares: 

Acknowledging that some shareholders couldn’t participate initially, Raveendran mentions the board’s contemplation of offering renounced shares to existing shareholders, ensuring no further dilution of their shareholding.

Discontent Among Prominent Investors: 

Despite BYJU’S efforts, notable investors such as Prosus, General Atlantic, Sofina, and Peak XV express discontent, 

attempting to nullify the rights issue. They argue that the enterprise valuation significantly undervalues BYJU’S.

Emphasis on Shareholder Unity: 

Raveendran expresses goodwill towards all shareholders despite legal challenges, urging them to be part of BYJU’S “turnaround story.” He reassures that existing shareholders remain a priority amid interest from third parties.

NCLT’s Involvement: 

The National Company Law Tribunal (NCLT) refuses to stay the extraordinary general meeting (EGM) scheduled 

to address the share capital increase. However, the tribunal schedules further hearings to address the investor group’s concerns.