Byju Raveendran says company's $200 million rights issue fully subscribed

Raveendran said that Byju's will appoint a third-party agency to monitor the usage of funds raised in the rights issue

The $200 million rights issue floated by the company in January has been fully subscribed, but its founder has urged the shareholders to participate in it.

In a letter to shareholders, seen by Business Standard, Byju Raveendran, who is also the unicorn's chief executive officer (CEO), said, "Our rights issue is fully subscribed and my gratitude to my shareholders remains strong."

"But my benchmark of success is the participation of all shareholders in the rights issue. We have built this company together and I want us all to participate in the renewed mission. Your initial investment laid the foundation for our journey and this rights issue will help preserve and build greater value for all stakeholders," he said.

 

Raveendran also said that to monitor the usage of funds raised in the rights issue, Byju's will appoint a third-party agency. "This agency will report the shareholders on a quarterly basis, within 45 days from the end of the quarter, along with commentary from the board," he said.

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He said that he was committed to restructuring the board of the company and appointing two non-executive directors, adding that the audit of the financial results for 2022-23 is expected to be closed by the end of the current quarter.

Byju's board currently has Raveendran, his wife Divya Gokulnath and brother Riju Raveendran. The company is scheduled to have its Extraordinary General Meeting on February 23.

The letter also said that the $200 million issue would give Byju's the capital to meet the current liabilities and "also provide sufficient growth capital".

Byju's floated a rights issue last month to raise $200 million at an enterprise valuation in the range of $220-250 million, 99 per cent lower than its peak valuation of $22 billion in 2022.

In the letter, Raveendran said the board decided on the valuation to make it attractive for all shareholders to participate in the issue.

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"As the largest shareholder and provider of capital to the company, it would have been in my best interest to price this rights issue high. But that would not be in the best interest of the company," he said.

Raveendran also wrote that in the last two years, he has personally put in $1.1 billion for salaries and operations. However, it is unclear how much he has committed to pay in the rights issue.

The company will soon launch an artificial intelligence (AI) tool, Byju's Wiz, which will help students with the solutions and be integrated into its Geogebra's maths engine.