Insolvency Proceedings Against Dunzo Digital Take New Turn
Insolvency Proceedings Against Dunzo Digital Take New Turn
Introduction
The Bengaluru bench of the National Company Law Tribunal (NCLT) has dismissed a fresh insolvency plea filed by Exotel Techcom Private Limited against Dunzo Digital, a Reliance-backed hyperlocal delivery startup.
Factual Background
Dunzo, founded in 2014, grew rapidly by offering doorstep deliveries of groceries, food, and essentials. Despite raising nearly $485 million from prominent investors like Reliance Retail and Google, the company struggled to sustain operations due to the challenges of hyperlocal delivery economics.
Procedural Background
Exotel Techcom Private Limited, an operational creditor, moved the NCLT seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Dunzo. However, the tribunal noted that Dunzo had already been admitted into insolvency on August 6, 2025, following a petition by Velvin Packaging Solutions Pvt. Ltd.
Issues
The main issue was whether Exotel's application for CIRP could be entertained separately, given that Dunzo was already undergoing insolvency proceedings.
Contentions of the Parties
Exotel: Exotel sought initiation of CIRP against Dunzo, claiming unpaid dues.
Dunzo: Dunzo was already undergoing insolvency proceedings, and an Interim Resolution Professional (IRP) had been appointed to manage the process.
Reasoning and Analysis
The NCLT dismissed Exotel's application, stating that it could not be entertained separately since Dunzo was already in CIRP. The tribunal directed Exotel to present its claims before the IRP or Resolution Professional in accordance with the Insolvency and Bankruptcy Code (IBC), 2016.
Implications
This development adds to Dunzo's financial woes, which have been exacerbated by its struggles to sustain operations and competition from other quick commerce players. Reliance Industries Ltd. recently wrote off its $240 million investment in Dunzo.
Relief Sought
Exotel sought initiation of CIRP against Dunzo, but the NCLT directed it to file its claims before the IRP instead.
