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Edtech giant Byju's rights issue gets $300 million commitment: Report

ISN Team
New Update
byjus rights issue

Edtech giant Byju's has seen a commitment from investors for its rights issue aimed at raising funds.

Initially set to raise $200 million, the company has received a commitment of $300 million, despite a drastic valuation drop from its peak of $22 billion to a range of $220-250 million, Inc42 reported. The development comes as the rights issue, floated in January, is set to conclude by the end of February.

Enhancing transparency 

In response to concerns from investors, Byju's has proposed the appointment of two independent directors to its board. The move, aimed at enhancing transparency, is contingent upon the successful closure of the rights issue and the declaration of the fiscal year 2023 financial results. 


Addressing governance and financial management

A group of investors has called for an Extraordinary General Meeting (EGM) on February 23 to address issues related to governance, financial mismanagement, and the restructuring of the board.

The call for action highlights the investors' concerns over the company's direction and management practices. Notably, these investors, including prominent names like General Atlantic and Prosus, have previously sought board meetings to resolve these issues, which were disregarded.

What is the purpose of fundraising?

Byju's plans to utilize the funds from the rights issue for capital expenditure, general corporate purposes, and to address immediate liabilities and operational requirements. However, the company faces significant challenges, including an insolvency plea filed by foreign lenders and ongoing issues such as cash crises, mass layoffs, and legal troubles.