Byju’s Parent Escalates Rights Issue Dispute to SC

Think & Learn Private Limited, the parent company of BYJU'S, has gone to the Supreme Court of India challenging a National Company Law Appellate Tribunal (NCLAT) order that permitted Aakash Educational Services Limited to proceed with the second tranche of its ₹240 crore rights issue. The case brings into picture certain concerns that revolve around corporate governance, shareholder rights, and insolvency processes in India’s edtech ecosystem.

The appeal, to be heard by a bench led by Justices P.S. Narasimha and Alok Aradhe, contested the February 3 NCLAT order permitting Aakash to raise an additional ₹140 crore as part of its two-stage ₹240 crore fundraising plan.

How Did The Conflict Start?

Aakash initiated the rights issue to raise fresh funds under financial strain. Think & Learn, which has a 25.75% stake in Aakash, is presently dealing with corporate insolvency resolution proceedings after admission by the NCLT’s Bengaluru bench in July 2024.

In October 2025, NCLAT permitted Aakash to continue with the fundraising and instructed Think & Learn to preserve its stake by making proportionate subscriptions. The company took part in the first tranche and deposited the necessary amount of money. However, Aakash did not allot the shares due to regulatory concerns, including possible FEMA compliance difficulties related to the source of funds.

Due to this, Think & Learn’s stake fell to 10.99%, significantly reducing its voting power, which is the key reason for challenging the order.

What Did NCLAT Do?

While admitting the need for a detailed analysis of the issues, NCLAT declined to hold the second tranche. It allowed Think & Learn to apply up to its original entitlement and restricted Aakash from passing special resolutions until the dispute is settled.

Think & Learn argues that permitting the rights issue to proceed without correcting the initial allotment imbalance violates its equity rights and may permanently dilute its stake.

What Are The Governance Concerns?

The dispute raises wider governance concerns. A rights issue is designed to prevent dilution by offering shares proportionately to existing shareholders. Think & Learn maintains that accepting funds without allotting shares breaches this principle.

Aakash, however, maintains that the delay was driven by regulatory caution and that FEMA-related concerns are currently under review before the NCLT.

Investors’ Takeaways

The conflict raises the issue of increased strain in India’s startup and edtech ecosystem, particularly around matters of insolvency, shareholders' rights and governance norms. As Think & Learn is under CIRP and Aakash is continuing fundraising efforts, the case sets an important learning on how rights issues are handled when a key shareholder is in insolvency. A Supreme Court ruling will help in bringing balance between regulatory compliance, minority safeguards, and capital raising flexibility.

The stock investors shall be very careful. Legal complications can affect valuations and delay strategic decisions. Investors should keep an eye on the Supreme Court hearing, carefully evaluate governance concerns, and avoid reacting to short-term volatility. At the same time, focus should be on companies with strong compliance.

Sources

Business Standard

Economic Times

24Law

New Indianexpress