Byju’s Insolvency and Aakash: The Students Must Not Pay for the Parents’ Mistakes
I have been watching the Byju’s insolvency proceedings with the same unease with which I watch a complicated IVF case after a difficult transfer. The medical procedure may be over, but the real work—monitoring, documentation, and making sensible decisions under uncertainty—has only begun.
For parents searching for “Aakash Byju’s insolvency”, the short answer is this: Aakash Educational Services is not the same legal entity as Think & Learn, the insolvent parent company of Byju’s. Aakash’s operations, centres, teachers, and student programmes do not automatically disappear because Think & Learn is in insolvency. But ownership and control of Aakash are still entangled in the insolvency process, and this creates genuine uncertainty for investors, employees, students, and parents.
The most important point is also the least dramatic: a child enrolled at Aakash should not be treated as a creditor in Byju’s financial collapse. The parent’s immediate concern should be whether the centre is functioning, whether classes are being held, whether teachers are being paid, and whether the promised academic support is actually being delivered.
Everything else—shareholding disputes, rights issues, auctions, arbitration claims, and competing resolution professionals—matters because it may affect the institution later. It should not be allowed to distract parents from checking the service they are buying today.
The number that explains the confusion
Think & Learn originally held approximately 25.75% of Aakash. Aakash subsequently issued a rights issue of about ₹240 crore. Think & Learn challenged the rights issue, alleging oppression and mismanagement. It also subscribed to part of the issue, but Aakash withheld shares relating to the first tranche, citing concerns about the origin of the funds.
As a result, Think & Learn’s recorded holding fell to about 10.99%.
The dispute travelled through the National Company Law Tribunal and the National Company Law Appellate Tribunal. The Supreme Court did not intervene at that stage. The NCLAT later permitted Think & Learn to participate in the second tranche so that its earlier entitlement could be preserved, while directing Aakash not to take decisions requiring a special resolution during the pendency of the proceedings.
Now the parties have reportedly reached a settlement. Once implemented, Think & Learn is expected to hold roughly 32% of Aakash—higher than its earlier holding. The settlement reportedly involves allotment of rights issue shares and transfer of existing shares, without cash consideration between Think & Learn, Aakash, and the Manipal Group.
That is a remarkable outcome. An insolvent parent may end up with a larger stake in one of its most valuable subsidiaries than it held before the dispute began. But “Think & Learn will hold 32%” does not mean that Byju Raveendran or the former Byju’s management will personally control Aakash. The shares belong to the company in insolvency, and the resolution professional must deal with them according to the insolvency process.
For parents, this distinction is essential. The brand on the classroom wall, the company running the coaching centre, and the insolvent parent company are related—but they are not interchangeable.
Aakash is not automatically insolvent because Byju’s is insolvent. But its ownership is part of the insolvency puzzle, and parents are entitled to ask whether that uncertainty is affecting the education being delivered.
Why did Byju’s insolvency happen?
I have written a longer plain-English timeline of Byju’s collapse, so I will not repeat every step here. The broad pattern is familiar to anyone who has watched a startup grow too quickly.
Byju’s raised enormous sums of money, acquired companies, expanded into several countries, spent heavily on advertising, and built a sales machine that depended on continuous growth. The company also took on debt and became involved in multiple disputes with lenders, vendors, and other creditors.
Then growth slowed. Cash became scarce. Payments were delayed. The company could not satisfy all its obligations. The insolvency proceedings began after the Board of Control for Cricket in India approached the tribunal over unpaid sponsorship dues of approximately ₹159 crore.
There is a lesson here that I have seen repeatedly in early-stage investing. A company can have a famous brand, millions of users, impressive revenue, and a large valuation—and still be fragile if its cash flows are poor and its obligations are not understood.
In medicine, I do not judge the health of a patient by how energetic he appears in the waiting room. I look at the underlying parameters. In a company, I look past the valuation and ask: how much cash is coming in, how much is going out, who must be paid, and what happens if the next funding round does not arrive?
Byju’s demonstrated what happens when the story becomes more persuasive than the balance sheet.
What does the Aakash settlement change?
The settlement may reduce one legal dispute, but it does not magically repair the larger Byju’s insolvency.
Aakash is a valuable asset because it has a recognisable name, physical coaching centres, an established student base, teachers, and a business model that is easier to understand than an app selling long-term education packages. Its value lies in the operating business, not merely in the logo.
If Think & Learn’s stake rises to roughly 32%, that stake becomes an important asset in the insolvency resolution process. The resolution professional may eventually seek to preserve, sell, or otherwise deal with it for the benefit of creditors, subject to the law and the tribunal’s orders.
This creates several possible outcomes:
- Aakash may continue operating with little visible change, while its shareholding is sorted out in the background.
- A new investor or resolution applicant may acquire Think & Learn’s stake.
- The Manipal Group and other shareholders may negotiate a different ownership arrangement.
- Further litigation may delay decisions or create uncertainty around control.
I cannot predict which of these will happen. Anyone who confidently claims to know the final ownership structure is selling certainty that does not exist.
But I can say what should happen. Aakash’s management should communicate clearly with parents and teachers. It should publish who is responsible for the centre, who will honour fee commitments, what happens to prepaid courses, and where parents should complain if classes are disrupted.
Silence is not a legal strategy from a parent’s perspective. It is simply anxiety.
Will Aakash classes continue?
For most students, the practical answer will depend on the individual centre and the local operating team, not on the shareholding chart.
Aakash has been operating as a coaching institution with its own classrooms, faculty, academic schedules, and administrative systems. If those continue, a student can continue learning even while ownership is being debated in court.
Parents should visit the centre rather than rely only on WhatsApp messages or assurances from a salesperson. I would check five things:
- Are classes taking place according to the published timetable?
- Are the same teachers attending, or is there unexplained turnover?
- Are tests being conducted and evaluated on time?
- Are study materials and doubt-solving sessions actually available?
- Does the centre provide a written answer about refunds, transfers, and course continuity?
The last question matters because many education companies collect large amounts upfront. A parent may pay ₹1 lakh or more for a two-year programme. That payment is not a minor monthly subscription. It is a significant financial commitment, often made after a high-pressure sales conversation.
I have seen a similar pattern in healthcare. A patient pays a large advance to a hospital because the counsellor promises a particular package, doctor, or outcome. Later, the hospital changes its staff or its terms. The patient discovers that the receipt is clear but the promised service is not.
Parents should keep the admission form, fee receipt, loan documents, refund policy, brochures, WhatsApp promises, and emails. If there is a dispute later, memory will not be enough.
Should parents withdraw their children?
I would not advise every parent to withdraw a child merely because the word “insolvency” appears in a newspaper headline. Changing a student’s coaching programme in the middle of an academic year has a cost. The child loses continuity, teachers, peer support, and sometimes confidence.
But I would also not advise a parent to remain loyal to a brand that is no longer delivering.
| What the parent observes | What it may mean | Reasonable response |
|---|---|---|
| Classes, tests, teachers, and support continue normally | The local centre may be functioning despite corporate uncertainty | Continue, but retain documents and review the situation periodically |
| Teachers are leaving and schedules are repeatedly changed | The centre may be facing staffing or cash-flow problems | Ask for a written explanation and examine transfer options |
| Fees are demanded urgently with discounts or threats | The centre may be trying to raise immediate cash | Do not pay large additional amounts without clear written terms |
| Classes stop or promised services disappear | The contracted service may no longer be supplied | Document the failure, seek a refund, and consider another provider |
The key is to separate fear from evidence. A parent should not make a hurried decision because another parent forwards an alarming message. Nor should a parent ignore repeated missed classes because the Aakash brand still looks reassuring.
Education is not a financial investment where one waits patiently for the value to recover. A student has only one academic year. Lost teaching time cannot be recovered through a later resolution plan.
What about prepaid fees and refunds?
This is where parents should be particularly careful.
If a parent has paid Aakash directly for a course, the claim is likely to be against the entity named on the admission form and receipt. If the payment was made to a franchisee, the legal position may be different. If a financing company paid the fee and the parent is repaying an education loan, there may be a separate contract with the lender.
Parents should not assume that a refund will automatically follow if the ownership of Aakash changes. Nor should they assume that the insolvency of Think & Learn cancels every obligation connected with the Aakash centre.
I would write to the centre and the corporate office, asking for:
- the legal name and registered address of the contracting entity;
- a statement of the services still to be provided;
- the refund and transfer policy;
- the treatment of unused classes, tests, and study material;
- the name of the grievance officer or responsible senior executive.
Send the communication by email and preserve proof of delivery. If the response is unsatisfactory, a parent may consider the consumer forum, the appropriate regulatory authority, or legal advice. I am not offering a legal opinion here; the correct remedy will depend on the contract and facts.
What I would not do is pay another large amount simply because a salesperson says, “This offer is valid only today.” A company under financial pressure may become more aggressive in collecting cash. That is precisely when a parent should slow down.
The ₹150 crore auction is a warning about records
The Aakash shareholding dispute is only one part of the Byju’s insolvency story. Another dispute concerns assets of Byju’s K3 Education.
The National Company Law Tribunal recently directed parties to maintain the status quo over assets that had reportedly been auctioned for approximately ₹16 crore, despite claims that they were worth around ₹150 crore. The assets included articles and equipment from a subsidiary. The resolution professional of K3 Education argued that K3 had a substantial interest in them and that their disposal could leave K3 without assets to continue its insolvency process.
The resolution professional of Think & Learn disputed that position, saying that Think & Learn had procured the hardware and owned the educational content stored on the devices.
The tribunal did not finally decide ownership. It noted that neither side had produced sufficient documentation to conclusively establish who owned what. It asked for inventories, photographs, storage details, valuation information, and details of the auction process.
This is not a minor procedural detail. It is the heart of corporate governance.
When a company operates across multiple subsidiaries, acquisitions, warehouses, and technology platforms, ownership must be documented. Which company bought the laptop? Which company owns the server? Which company paid for the content? Which company has the right to use it? Which company receives the sale proceeds?
If the answer is unclear after insolvency begins, different resolution professionals may each claim the same asset. The result is delay, litigation, and destruction of value.
The most expensive asset in a distressed company is often not the equipment or the software. It is the time lost because nobody can prove who owns them.
Parents may wonder what an auction dispute has to do with their child’s coaching class. The connection is direct. A coaching company depends on classrooms, computers, content, test systems, teachers, and student records. If the ownership and right to use these assets are disputed, the quality of the service can deteriorate even if the brand remains intact.
A parent should therefore ask a simple operational question: who is actually providing the service to my child today?
What students should learn from Byju’s
I do not want children to come away from this episode believing that education companies are dishonest or that technology has no place in learning. That would be the wrong lesson.
I have seen good teachers use technology intelligently. A recorded explanation can help a student revise. A well-designed test can reveal a gap that a classroom teacher missed. A free digital resource can be enormously useful to a student who cannot afford expensive coaching. I have written about free AI tutors for Indian students because I believe access to good explanations should not depend entirely on the ability to pay.
The right lesson is that technology does not remove the need for trust, accountability, and sound economics.
A student is not a monthly active user. A parent is not merely a customer acquisition cost. A teacher is not just content delivery capacity. When a company speaks about education in the language of sales funnels and conversion rates, something important has already been lost.
Students also need to understand the difference between learning and consuming content. Watching thousands of hours of videos does not guarantee understanding. Buying a famous course does not guarantee discipline. A large test-preparation company cannot take responsibility for every hour a student spends studying.
But the reverse is also true. A student cannot compensate for a company that fails to provide the classes, tests, and teachers it promised. Responsibility must exist on both sides.
What investors should have seen earlier
As an angel investor, I find the Byju’s story painful because many of the warning signs were visible long before the collapse.
Large fundraising rounds can conceal weak unit economics. Acquisitions can create the appearance of growth while adding management complexity. Aggressive sales can produce impressive bookings but poor collections. Long-term prepaid contracts can make current revenue look healthy while creating future obligations.
I have made my own investing mistakes. I have sometimes been seduced by a founder’s clarity, ambition, and ability to tell a compelling story. Over time, I have learned to ask more boring questions: What happens when growth slows? How much cash does the company need each month? Are customers renewing without being pushed? Are employees staying? Does the founder know the difference between revenue and cash?
These questions are boring only until the company runs out of money.
In IVF, I tell patients that a good-looking embryo is not the same as a guaranteed pregnancy. In investing, a high valuation is not the same as a healthy business. In education, a famous brand is not the same as a reliable learning environment.
The common error is confusing a proxy with the thing itself.
Byju’s brand was treated as a proxy for educational quality, business strength, and trustworthiness. Aakash’s name may now be treated as a proxy for financial safety. Neither is sufficient. Parents must inspect the actual service. Investors must inspect the actual cash flows. Students must inspect the actual learning.
What should Aakash do now?
If I were advising Aakash, I would not begin with a public-relations campaign. I would begin with radical operational clarity.
I would publish a short, plain-language note answering the questions parents are asking:
- Which legal entity operates each centre?
- Are existing admissions and fee commitments being honoured?
- Will teachers, tests, study material, and doubt-solving sessions continue?
- Who will handle refunds and transfers?
- Does the current shareholding dispute affect day-to-day operations?
- Where should parents report a problem?
I would also hold meetings with teachers. Teachers are usually the first to know when an institution is in trouble. If salaries are delayed, faculty morale collapses. If faculty morale collapses, students notice before the legal paperwork reaches a conclusion.
I would publish service-level commitments rather than vague assurances. For example: if a scheduled class is cancelled, when will it be replaced? If a teacher leaves, how quickly will another teacher be assigned? If a centre closes, how will students be transferred?
Trust is not rebuilt through advertisements. It is rebuilt when a parent sees that a missed class is replaced, a complaint receives an answer, and a refund is processed without a fight.
My advice to a parent considering Aakash today
I would not reject Aakash solely because of its association with Byju’s. Aakash has its own history and operating identity. Nor would I enrol a child simply because the Aakash name remains familiar.
I would visit the exact centre. I would speak to two current students and one teacher, not only the counsellor. I would ask to see a recent timetable and test schedule. I would understand whether the course is being delivered by Aakash directly or through a franchise arrangement. I would avoid paying the entire fee upfront if an instalment option is available on reasonable terms.
I would also compare the course with alternatives. The right choice may be another coaching institute, a local teacher, school-based preparation, self-study, or a combination of free digital resources and targeted help. My own view is that parents often overpay for the comfort of a brand when what the child really needs is a patient teacher, regular feedback, and a quiet place to study.
Coaching is not a substitute for parenting, and it is not a substitute for learning. It is only one input.
Parents who are considering home-based or independent learning can also read my discussion of whether homeschooling is legal in India. I am not suggesting that homeschooling is the answer for everyone. I am suggesting that families should know they have choices, rather than treating a large coaching brand as the only route to academic success.
The larger failure was not technological
It is tempting to describe Byju’s as a failure of online education. I think that is too simple.
The deeper failure was a failure of stewardship.
Students and parents entrusted the company with money, time, personal data, and academic hopes. Employees entrusted it with their livelihoods. Investors entrusted it with capital. Lenders entrusted it with repayment. A company can make mistakes while trying to serve these groups. But it cannot treat all of them as fuel for growth and then expect trust to survive when the funding stops.
The Aakash dispute shows how the consequences spread. A rights issue becomes a shareholding dispute. The shareholding dispute becomes an insolvency asset. The insolvency asset becomes a question about creditor recovery. An equipment auction becomes a dispute over ownership. Meanwhile, a student in a classroom still needs a teacher on Monday morning.
That is the moral asymmetry of education businesses. Investors can write down an investment. A lender can restructure a loan. A company can enter insolvency. A student cannot recover a missed year before an examination.
That is why parents should judge Aakash by what happens in the classroom this week, not by what a tribunal may decide next year.
I hope the settlement reduces the legal noise around Aakash. I hope the institution remains focused on teachers and students. I hope the insolvency professionals preserve value rather than selling assets in a way that destroys the operating business. And I hope investors learn to ask harder questions before rewarding growth without governance.
My own conclusion is quite simple. I would be comfortable with my child attending an Aakash centre only after checking that the centre is functioning independently and reliably, and I would not pay a large advance merely because the salesperson invokes the Aakash or Byju’s name. In education, the asset that matters most is not the shareholding on paper. It is the teacher who turns up at 7 a.m. on a rainy Monday and teaches well.