Mint Explainer | Why Aakash’s ₹250-crore fundraise is now a proxy fight over Byju’s ownership

Crisis-hit Aakash Educational Services Ltd. (AESL) thought: ₹250-crore rights issue, there will be a massive reset after top-tier exits and a return to losses in FY23. The test preparation chain, once Byju’s profit engine, needs new capital to fund stable operations and growth.

The board was opened for the first time ₹Think & Learn Pvt. 100 crore tranche to existing investors including all major shareholders like. Ltd (TLPL) is remitting their pro rata amount. But AESL now TLPLs ₹The allocation of Rs 25 crore was put on hold, stating that the funds did not comply with Foreign Exchange Management Act (Fema), Companies Act and External Commercial Borrowing (ECB) rules.

Mint explains what this dispute means for the rights issue itself and for TLPL’s dwindling stake in Aakash, a key asset caught in the middle of Byju’s bankruptcy.

How did Aakash come here?

₹The Rs 250-crore rights issue comes after months of legal wrangling over Aakash’s plan to raise fresh capital through shareholder offer. Byju’s, which acquired Aakash in a cash and stock deal worth about $950 million in April 2021, and one of its creditors have objected to the fundraising.

Ranjan Pai’s Manipal Group currently holds around 58% of Aakash even as the engineering and medical entrance testing chain grapples with loss of leadership and uncertainty linked to Byju’s bankruptcy proceedings. The rights issue plan was led by Byju’s parent company Think & Learn and US-based lender GLAS Trust Co. opposed, but the petitioners failed to get interim relief in the National Company Law Appellate Tribunal (NCLAT) in late October. The Supreme Court subsequently refused to accept legal challenges against these orders, effectively paving the way for Aakash to proceed with the shareholder-approved rights issue and related capital raising steps.

Even when the money started coming in, top executives were in a state of flux. Finance chief Vipan Joshi left on October 31, nearly two months after chief executive Deepak Mehrotra resigned in August, underscoring the rapid succession of top-level exits. Mehrotra was replaced by Chandra Sekhar Reddy Garisa as managing director and CEO effective August 19; Garisa most recently became head of Pai’s family office, Claypond Capital.

Why TLPLs ₹25 crore stranded

Byju’s parent company TLPL is currently going through a corporate insolvency resolution process. The decision expert had unsuccessfully challenged the Aakash rights issue before the NCLT, NCLAT and the Supreme Court. Despite this, TLPL started exercising its proportionate rights by depositing money. ₹25 crore in number.

Later, former promoter Riju Ravindran filed an application with the NCLT, Bengaluru, alleging that TLPL had increased the bid. ₹25 crore by exporting ₹$100 billion worth of bonds under a structure that could violate Fema, ECB guidelines and Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. The National Company Law Tribunal (NCLT) is examining these allegations. At Aakash’s insistence, RP entered into a partnership between TLPL and Byju’s Alpha Inc., a Delaware-based investor. He shared the bond subscription agreement between and the legal opinion claiming that the subscription money is suitable for Fema.

After considering multiple legal submissions, Aakash’s board of directors decided to postpone the allotment of shares to TLPL until the NCLT rules on the structure. ₹While Rs 25 crore has been parked in an interest-bearing account until the final decision, AESL has also stated that it may open a second account ₹Rights worth 140 crore will be issued in due course. Two people familiar with the company’s operations confirmed that TLPL’s funds were parked separately and noted that this arrangement could have broader implications on the existing rights issue.

The second person said that the board took this issue into consideration. ₹The 100-crore rights issue is “closed for all practical purposes”, with only TLPL’s portion pending. “It is closed pending clarity from the court as there are some conflicting views on whether we can get their money or not,” this person said.

Archana Balasubramanian, partner at Agama Law Associates, said that although ECB rules have now been liberalised, borrowed funds can be used for business expansion, infrastructure expansion etc. He said he did not allow it to be used for reasons other than that. Similarly, speculative investment and equity investment are not allowed through the ECB mode, he added.

“However, if the investment is to finance infrastructure activities of a wholly owned subsidiary, this may be handled differently. The intent of the law appears to be to prohibit speculative trading in equity and not to inhibit genuine business expansion,” Balasubramanian said.

Is the rights issue technically ‘on hold’?

lawyers Mint He said parking TLPL’s contribution alone does not resolve the fundamental question: whether a rights issue can be considered completed when a shareholder subscribes but cannot be allotted shares due to a legal impediment in the way of funding.

An arbitration and insolvency lawyer advising clients on NCLT matters said on condition of anonymity: “If participation in a rights matter faces a legal bar for even a single shareholder, the matter should not proceed in its current form.”

The lawyer added that a rights issue, by definition, applies on a pro rata basis to all existing shareholders and therefore cannot be designed so that a particular class of shareholders is effectively barred from participation, while others subscribe and walk away with a larger shareholding.

“This creates an imbalance by design and undermines the nature of the rights issue,” the lawyer added.

The lawyer also pointed out that it is a business call for a shareholder to ultimately choose to exercise or exercise their rights, but all shareholders must have at least a legally valid subscription.

If an investor wants to acquire rights, offers money but cannot allocate shares due to a legal restriction on the source of funds, “then in essence it ceases to be a matter of genuine rights and begins to look like a selective or preferential allocation in favor of those who can participate,” the lawyer said.

Hardeep Sachdeva, senior partner at AZB & Partners, said that in the current scenario, suspension of a shareholder’s subscription to a rights issue should not invalidate the entire matter. Sachdeva said the company should have the right to proceed with the allotment to other shareholders subject to necessary approvals, including from the RP and the monitoring committee.

“Such dilution is not prima facie illegal; the NCLT will examine whether it has been carried out in a manner consistent with the IBC (Insolvency and Bankruptcy Code), the Companies Act and the principle of equal treatment of stakeholders,” Sachdeva added.

Apart from this, AZB & Partners’ Sachdeva noted that if a shareholder alleges oppression or mismanagement, the court usually asks whether the process was transparent, whether regulatory hurdles such as Fema restrictions are real, and whether value destruction was avoidable.

“Technically, a fresh rights issue could be initiated during the CIRP (Corporate Insolvency Resolution Process), but prudence suggests waiting for clarity on the subscription structure before the NCLT. Otherwise, the company risks increasing disputes and undermining confidence in the resolution plan,” he added.

Who is Beeaar Investco and why is it important?

Beeaar Investco Pte., two people familiar with Aakash’s cap sheet said. Ltd, which holds about 16% stake in AESL, is a Singapore-registered vehicle through which Byju Raveendran maintains his economic interests in the company. The Board allowed Beeaar’s approximately proportionate participation ₹16 crore in the ongoing process. ₹100 crore rights issue even with TLPLs ₹25 billion is parked until NCLT’s financing structure is reviewed.

Raveendran’s connections with Aakash run deep. Pai first backed Byju through Aarin Capital in 2011 and later doubled down on Aakash by buying debt and converting it into equity in 2023-24. A CARE Ratings report dated August 2025 states that Raveendran holds a 41.49% stake in AESL through TLPL and Beeaar Investco Pte. Ltd and remains on the AESL board, although according to AESL and MEMG management he currently has no role in day-to-day operations or treasury decisions.

The person aware of AES’s activities added that, as mentioned earlier, Beeaar Investco’s shares are effectively hedged for now. “The shares of Beeaar Co are held by Byju (Raveendran), but they are under litigation with us along with Qatar (investors) and Byju for these shares. So, he does not have the control to sell or liquidate them until the litigation is over,” said the person, who requested anonymity.

With Think & Learn currently in bankruptcy, Aakash itself has become a highly controversial entity. The NCLT process has seen rival bids from Pai’s Manipal Group, which currently controls about 58% of AESL, and Ronnie Screwvala’s upGrad.

Screwvala, whose education technology firm focuses on higher education and skills development, clarified that upGrad is not focused on the K-12 segment.

“upGrad would like to clarify that this is not about the K-12 sector and we are not interested in that sector, but Think & Learn has assets in Higher Education as well as assets that young students/college graduates aspire to learn more about and we will focus on those assets,” Screwvala said in a previous statement.

This changed Aakash ₹The Rs 250-crore rights have turned into a proxy war for what is left of Byju, with its key subsidiaries including Aakash and Great Learning currently at the center of the insolvency resolution fight.