We computationally study the mechanistic pathway for the synthetically valuable cascading N-H functionalization followed by the C-C bond-forming reaction. The impetus to study such multicomponent reactions catalyzed by Rh(I) arises from the highly fluxional nature of the onium ylide involved, which is often not amenable to experimental detection. Our results throw light on an interesting mechanistic paradigm where the binding of the ylide to the metal plays a crucial role. The study provides some much-needed insights to expand the scope of these highly valuable methodologies to a broader range of asymmetric reactions.