Once hailed as India's most valuable startup, with a staggering valuation of $22 billion, Byju's is now staring down insolvency proceedings. Why? Because they failed to pay around Rs 159 crore to cricket body BCCI.

So here's what went down....The National Company Law Tribunal or the NCLT in Bengaluru gave the green light for bankruptcy proceedings against Byju's on July 16. They’ve appointed an interim resolution professional, Pankaj Srivastava, who will now call the shots instead of Byju's board of directors, whose assets are frozen. Yes, even Byju Raveendran, the founder and CEO, will now report to Srivastava and the existing board consisting of his wife, Divya Gokulnath, and his brother, Riju Raveendran, remain powerless.

Byju's is now planning to challenge the decision in the National Company Law Appellate Tribunal. A company spokesperson said that they're aiming for an amicable settlement with the BCCI and are confident they can still reach one.

So, what led to this debacle? It all circles back to a title sponsorship deal from 2019 that left Byju's owing the BCCI a hefty Rs 159 crore. Byju's tried to take the dispute to arbitration earlier this year, but the NCLT shot that down. The BCCI, having had enough, dragged them to the NCLT for non-payment.

Remember, Byju's had taken over from Oppo India as the official Team India sponsor back in 2019. The deal was supposed to last until March 2022 but got extended to November 2023 for a whopping $35 million. Byju's wanted out by December 2022, but the BCCI insisted they stay until March 2023 to ensure a smooth transition to new sponsors.

This news is a major blow not just to Byju's, but also to its investors, many of whom, like Prosus, have already written off their investments. With the company now in the hands of a resolution professional and managed by a committee of creditors, investors and debtors alike will have to wait and see if a resolution can be found. If not, liquidation looms large.

And what about the BCCI? Well, as an operational creditor, they'll only see their dues, or at least a part of them, after wages and financial creditors are paid. It's a tough spot for Byju's, which is already under immense pressure from investors, most of whom wanted Byju Raveendran out as CEO as far back as February.
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