Aakash Educational Services Ltd (AESL) is currently navigating a period of significant leadership transition and corporate restructuring, marked by the recent resignation of its chief financial officer, Vipan Joshi, effective October 31. Joshi, who served the company for over nine years and took on the CFO role in October 2022, announced his departure on LinkedIn, citing a desire to explore new horizons. This development adds to a series of leadership changes within the company as it progresses with a crucial rights issue.

Joshi's exit follows closely on the heels of the departure of chief executive officer Deepak Mehrotra, who stepped down in August, approximately 16 months after his appointment in April 2024. Chandra Sekhar Reddy Garisa has since been appointed as the managing director and CEO, with effect from August 19. Garisa brings experience from Claypond Capital, the family investment office of Dr. Ranjan Pai, before joining Aakash.

The company, once a key acquisition for Byju’s in a deal valued at about $950 million, has experienced considerable turbulence in recent months. Dr. Ranjan Pai's Manipal group now holds a majority stake in Aakash, with Pai having converted a $300 million debt investment into approximately 40% equity. Reports earlier this year indicated Pai's intention to further increase his stake by acquiring Blackstone's holding. However, this transaction remains pending due to an ongoing boardroom dispute.

The dispute centers on proposed amendments to Aakash’s articles of association (AoA) that were introduced at an Extraordinary General Meeting (EGM) last year. Blackstone, a significant minority shareholder, has staunchly opposed these changes, arguing that they would diminish the rights of minority stakeholders, thereby complicating the ownership landscape and internal governance of Aakash.

In parallel, Aakash's proposed rights issue, a critical component of its fund-raising efforts, faced legal challenges earlier this year. GLAS Trust, a creditor to Byju's parent company Think & Learn, and Byju's resolution professional Shailendra Ajmera of EY, had contested the rights issue in October. While the National Company Law Tribunal (NCLT) Bengaluru and subsequently the National Company Law Appellate Tribunal (NCLAT) Chennai both refused to grant interim relief to the petitioners, affirming the board's right to raise capital, the matter ultimately reached the Supreme Court. On Monday, the Supreme Court dismissed the civil appeals filed by Byju's creditors and related parties, thereby clearing the path for Aakash to proceed with its fresh fundraise.

Beyond these corporate and legal challenges, Aakash has also faced operational difficulties, including layoffs affecting 80-100 employees in September last year, as reported by Entrackr. Furthermore, the company has yet to file its annual reports for fiscal years FY24 and FY25, indicating potential transparency issues or administrative backlog. Historically, Registrar of Companies data shows a strong performance in FY22, with revenue climbing 44% to ₹1,421 crore from ₹983 crore in FY21, and net profit rising to ₹79.5 crore from ₹43.6 crore.

Aakash operates in a highly competitive educational services market, competing with established players such as Allen, FIITJEE, Bansal Classes, and Unacademy. In past interviews, then-CEO Deepak Mehrotra had outlined plans to raise approximately ₹500 crore and invest around ₹100 crore over two years to rebuild and scale Aakash Digital, indicating strategic directions for future growth despite the current challenges.