Oyo submits IPO documents with SEBI
Hospitality sector major OYO has submitted necessary documents to capital markets regulator SEBI to raise around Rs 8,430 crore ($1.2 billion) through public offering (OYO IPO). OYO will use the proceeds from the IPO to pay off debt and expand the company. OYO founder Ritesh Agarwal will not sell any stake in the IPO. Agarwal holds about 34 per cent stake in the company. Apart from this, investors like Lightspeed Venture Partners, Sequoia Capital, Star Virtue Investment, GreenOaks Capital and Microsoft will also not sell their stake.
What will be the IPO price?
In the offer for sale, shares will be sold by SoftBank, A-One Holdings, China Lodging and Global IVY Ventures. The company’s public offer can come in early 2022. In this, new shares worth Rs 7,000 crore will be issued. Apart from this, there will be an offer for sale (OFS) of Rs 1,430 crore. The price will be decided by the company and its stakeholders when the pre-IPO placement takes place.
With this, OYO will join the online companies that have submitted documents for the IPO in the last few months. These include Paytm, MobiKwik and Nayaka. Online food ordering firm Zomato’s public offer has arrived in July 2021.
Where will the fund be used?
According to the documents submitted to SEBI, the money raised from the IPO will be used to repay the debt of OYO’s subsidiaries. These companies have a debt of Rs 2,441 crore. Apart from this, the company will use Rs 2,900 crore for organic and in-organic growth. The rest of the money will be used to meet corporate needs.
Approval to form a public company
In September 2021, the shareholders of OYO’s parent company Oravel Stays approved the conversion of the company from a private limited company to a public limited company.
