Supreme Court clears Aakash rights issue; appeals dismissed on Nov 3, 2025
Rights issue will dilute Byju’s holding from 25.75% to below 5%
Decision enables Aakash to raise capital to support 3.5 lakh students
Byju’s creditors warn dilution may erode recoveries amid insolvency proceedings
The Supreme Court on 3 November 2025 dismissed appeals by Think & Learn’s resolution professional and GLAS Trust (representing US lenders to Byju’s), clearing the way for Aakash Educational Services to proceed with a rights issue that will dilute Byju’s parent Think & Learn’s stake from 25.75% to below 5%.
A two-judge bench refused to interfere with earlier tribunal orders that allowed Aakash to convene an extraordinary general meeting (EGM) and approve the capital-raising plan.
The SC said it was not inclined to admit the appeals challenging the NCLAT/NCLT decisions. The outcome permits Aakash to move ahead with the shareholder resolution and subsequent offer document required for a rights issue.
Legal Tug-of-War
The rights issue is a decisive corporate action that materially weakens Byju’s economic and voting position in Aakash, a company Byju’s acquired in 2021, at a moment when Byju’s itself is undergoing insolvency proceedings.
Aakash says it needs fresh capital to support operations serving some 3.5 lakh students and roughly 10,000 employees, and the board has argued the raise is commercially necessary.
The dispute travelled from the NCLT to the NCLAT and then to the Supreme Court. GLAS Trust and Think & Learn’s resolution professional had argued the rights issue was designed to dilute Byju’s stake and circumvent prior orders and creditor protections.
Aakash countered that the EGM was a routine shareholder process to approve an authorised-capital increase and that the company is independent of Byju’s insolvency proceedings. Tribunals earlier declined to grant interim relief against the EGM, and the apex court has now declined to stay those orders.
Strategic implications
With Byju’s shareholding set to fall sharply, control and influence dynamics at Aakash will shift, strengthening the position of existing majority holders such as Manipal Education and Medical Group and enabling AESL to raise the funds it says are required for operating continuity and growth.
Creditors to Think & Learn have argued the move could erode recoveries, while Aakash and its supporters say preserving the subsidiary’s commercial viability is the priority.
Potential next steps include (1) the formal dispatch of the rights-issue letter of offer and subscription timetable from Aakash, (2) any further legal remedies GLAS Trust or the resolution professional may pursue, and (3) developments in Byju’s insolvency resolution process that could affect creditor recoveries and corporate control questions across the group.
