Raveendran, his wife and co-founder Divya Gokulnath, and brother Riju Ravindran together hold a 26 percent stake in the company.
The dissenting investors will wait for the next hearing in the case at the National Company Law Tribunal on April 4
Dissenting investors of Byju’s are unlikely to subscribe to the recently floated rights issue even as the embattled edtech company offered 72 more hours to them to participate, signalling that the feud is far from over.
Last week, founder Byju Raveendran in a letter to shareholders extended an offer to mend relations and requested dissenting investors to get on the board with the rights issue.
“Nothing has changed in the way the management operates and the information, financial transparency and governance controls,” said a person familiar with the development on the investors’ side.
The dissenting investors — Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative and Prosus — will now wait for the next hearing of “oppression and mismanagement” plea they filed in the National Company Law Tribunal (NCLT) against the Raveendran-led management, sources told Moneycontrol.
The hearing is scheduled for April 4.
“Investors are already protesting in NCLT, so the question of participating in the current rights issue doesn’t arise,” the person added.
According to a source close to the company, Byju’s has extended the period to participate in the rights issue to April 4, a 72-hour window starting April 1.
This comes after the NCLT directed Byju’s to consider the extension of the closure date of the rights issue so that “the rights of the Petitioners does not get prejudiced”.
The dissenting investors stand to have their stakes diluted massively if they do not participate in the rights issue.
Raveendran, his wife and co-founder Divya Gokulnath, and brother Riju Ravindran together hold a 26 percent stake in the company. Investors seeking their ouster held over 30 percent as of June 2022.
The development also follows an extra-ordinary general meeting conducted by Byju’s on March 29. The meeting was conducted to increase authorised share capital of the company, a necessary step in accordance with the law to facilitate the pending rights issue for Byju’s.
The resolutions at the EGM were passed without any objections with all four investors staying away, Moneycontrol earlier reported.
In addition, on March 29, Raveendran, in his letter to shareholders, also said in response to the postal ballot announced on March 7, the company received more than 50 percent of votes in favour of increasing the authorised share capital.
The voting process for the resolutions discussed in the meeting will go on till April 6.
Byju’s floated the rights issue in January to raise $200 million at an enterprise valuation in the range of $220-250 million, which is a 99 percent reduction in its peak valuation of $22 billion.
The edtech company, once leading the industry, is dealing with a massive cash crunch. In addition, Byju’s has run into a series of troubles with its stakeholders including its board, auditors, investors, employees and government institutions like Employees’ Provident Fund Organisation, Board of Control for Cricket in India and Enforcement Directorate, among others.