Understanding the FIITJEE fallout: What’s going on?

Delhi-based FIITJEE, a prominent player in India’s competitive exam coaching landscape, is grappling with multiple issues, including abrupt closures of several centres, financial difficulties, and legal challenges.

Founded by DK Goel in 1992, FIITJEE (Forum for Indian Institute of Technology Joint Entrance Examination), is known for preparing students for competitive exams like the JEE, NTSE, KVPY, and Olympiads.

Over the years, it has built a reputation for its rigorous academic environment and high success rates. With a network of centres across India, it has been considered a trusted name in education for decades, attracting thousands of students annually.

FIITJEE has around 100 study centres and All India Test Series centres across the country, according to one of its official websites. The fees for its courses, depending on the programme and duration, range from a few thousand rupees to several lakhs.

In the week leading up to January 24, 2025, FIITJEE coaching centres began shutting down across North India. The closures started around January 17-23, affecting centres in Delhi-NCR, Uttar Pradesh, Madhya Pradesh, and Bihar, with a few more shutdowns occurring subsequently.

Industry experts YourStory spoke to note that this incident has highlighted weaknesses in the coaching industry, particularly for institutes that depend on a decentralised model. They emphasise the need for coaching centres to prioritise financial transparency, strengthen governance, and safeguard student well-being.

Here’s a breakdown of what’s happening.

What led to the abrupt closure of multiple centres? 

Several FIITJEE centres across North India, including Delhi, Noida, Meerut, Ghaziabad, Lucknow, Varanasi, and Bhopal, have abruptly shut down. FIITJEE states that it did not voluntarily close any of its centres. Instead, the sudden and unexpected departure of the Centre Managing Partner (CMP) and their entire team caused the shutdowns, creating what the institute describes as a “force majeure” situation.

Media reports indicate that FIITJEE is facing financial challenges, including salary delays, which may have led to staff departures and operational disruptions.

The management asserts this situation is a “criminal conspiracy” orchestrated by individuals with vested interests. FIITJEE claims to be taking steps to restore normalcy but has acknowledged operational challenges in the interim.

How has this crisis affected students, parents, and staff?

The sudden closures have disrupted students’ preparation for competitive exams, raising concerns among parents about their academic progress. Many parents who had paid significant fees are now seeking refunds or alternative solutions.

Parents are concerned about their children completing the syllabus, accessing study materials, and finding alternative coaching options. Some are considering moving to other institutes to stay on track with their preparation.

Some faculty and staff at the affected centres are also said to be facing uncertainty about their employment.

According to FIITJEE, its academic system remains unchanged, and students’ studies will continue without disruption. The institute advises students to stay focused on their preparation and assures them that their performance will not be affected. 

It states that the present turmoil in the institution is “temporary” and company officials are working to resume operations at all places within a “reasonable time”.

What financial and operational challenges is FIITJEE facing?

FIITJEE has acknowledged facing financial difficulties, attributing the crisis to mismanagement and the alleged betrayal by some CMPs. The institute has also claimed that it has been the victim of unfair trade practices by competitors.

FIITJEE states that its Managing Partners were fully responsible for the financial and operational decisions at their respective centres, with the corporate office in Delhi providing support based on their requests. Since 2011, a core group of senior Managing Partners (CMP), along with academic and financial heads, oversaw corporate operations.

It says that the Managing Partners operated on a profit-sharing model and had access to regular financial reports. FIITJEE claims that some Managing Partners mismanaged funds, leading to financial losses. According to the institute, by January 2024, it faced a worsening financial situation, with the Group CFO forecasting that after six months, the company might run into an operational cash crunch.

As per FIITJEE, its corporate leadership instructed the Core Group and Managing Partners to optimise manpower, improve work culture, and implement a recovery strategy to stabilise operations. However, most Managing Partners did not take action, and some allegedly halted admissions and disrupted processes instead of implementing the required optimisations, further worsening the financial crisis.

That said, the full extent and underlying causes of these financial challenges remain unclear. Some experts suggest that there may have been deeper systemic issues, including a possible over-reliance on the decentralised CMP model.

FIITJEE has offered to provide documents for review and for chartered accountants to examine its operations, asserting that it is a victim in the current situation. The company also highlights that it has reputable auditors, ensuring its financial accounts comply with legal standards.

What are the allegations and legal issues?

Several parents have reportedly filed police complaints citing concerns about service disruptions, lack of alternative arrangements for students, and communication challenges during the crisis.

Based on these complaints, FIITJEE’s founder, DK Goel, along with 11 others, has been booked by the Noida Police, PTI reported. While FIITJEE maintains that the closures are due to mismanagement by certain CMPs, parents argue that the institute should have had safeguards in place to prevent such disruptions.

According to FIITJEE, its legal team is addressing the criminal cases filed against the institute. It plans to conduct a detailed investigation as well. The institute also intends to pursue legal action against alleged unfair trade practices by competitors in both civil and criminal courts.

How might the broader coaching industry be impacted by this situation?

The coaching industry in India is highly competitive, with numerous players vying for dominance in a lucrative market. FIITJEE’s crisis creates an opportunity for competitors to attract affected students.

This crisis has raised concerns about the quality and reliability of private coaching institutions in India, highlighting the vulnerability of students and parents to disruptions and potentially affecting trust in other coaching institutes.

It also underscores the risks of mismanagement, dependence on partnerships, and the absence of contingency plans in the highly competitive coaching industry.

With some trust eroded among parents and students and potential legal challenges that could further strain its resources, FIITJEE's return to full operational efficiency will only become clear in the future.

(Cover image designed by Nihar Apte)