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Promoters of ed-tech company Byju’s, including Byju Raveendran himself, have sold over $400 million worth of shares in secondary transactions. This significant decline in promoter shareholding, from 71.6 per cent in FY16 to 21.2 per cent now, has raised questions about their confidence in the company’s future.
Despite claims that the proceeds from these sales were reinvested in the company, data suggests otherwise. Notably, the Byju family sold shares at a significant discount compared to the company’s touted valuation, creating further scepticism.
Byju’s is also grappling with challenges such as failing to disclose financial numbers, auditors resigning due to non-cooperation, and three independent directors quitting. The board now consists exclusively of Byju Raveendran family members. Additionally, the company faces hurdles in raising funds and is contending with a class action lawsuit in the US. The decline in promoter shareholding and the challenges faced by Byju’s indicate a crossroads for the EdTech giant.
In this podcast, Venkatesha Babu, Chief of Bureau-Bengaluru, businessline, explains the concerns surrounding Byju’s and the implications for its future growth.
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