Aakash Educational Services CFO Vipan Joshi resigns amid funding challenges

Aakash Educational Services Ltd. (AESL) chief financial officer Vipan Joshi has resigned, marking yet another senior-level exit at the test-preparation major, which is struggling with a cash crunch and mounting legal disputes.

Joshi, who joined Aakash in 2016 and became CFO in 2022, announced his departure on LinkedIn after nearly a decade with the company. Before joining Aakash, he worked with Vulcan Express, a subsidiary of Snapdeal, and with Grofers (now Blinkit). A qualified chartered accountant, he had earlier served as assistant vice president of finance at Grofers.

His exit follows that of managing director and chief executive officer Deepak Mehrotra, who stepped down in August after just over a year in the role. Mehrotra was succeeded by Chandra Sekhar Garisa Reddy on August 19. Reddy previously served as managing director at Claypond Capital, the family office of Manipal Group chairman Ranjan Pai. The Manipal Group currently holds about a 58% stake in Aakash.

Aakash, which competes with Allen Career Institute, PhysicsWallah, and Unacademy, has not filed its financial statements since FY23. For FY22, the company reported an 82% rise in profit to Rs 79.5 crore, with revenue growing 45% to Rs 1,421 crore.

The company is now looking to raise funds through a rights issue to sustain operations. The Supreme Court earlier this week rejected appeals by US-based Glas Trust and Byju’s parent Think and Learn’s resolution professional, Shailendra Ajmera, to halt the proposed issue. The move is expected to dilute Byju’s stake in Aakash from 25.75% to 6.125%.

Byju’s, which acquired Aakash in 2021 for $950 million, has been undergoing insolvency proceedings. Lenders have identified Aakash as its most valuable asset.

At an extraordinary general meeting held on October 29, Aakash shareholders approved increasing the company’s authorised share capital from about Rs 57.5 crore to Rs 297.5 crore, a key step ahead of the rights issue.

Both the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) and the Bengaluru bench of the National Company Law Tribunal (NCLT) declined pleas to stay the EGM, observing that insolvency laws do not permit interference in a subsidiary’s affairs solely because its parent is under bankruptcy resolution.