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  3. OYO in talks to raise Rs 1,000 crore from family offices; EGM expected …

OYO in talks to raise Rs 1,000 crore from family offices; EGM expected soon

17 Jun 2024

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Key Takeaways

  • Capital Raise Objective:

    • OYO aims to raise $570 million through bonds and family offices amidst a valuation adjustment of $2.5 billion.

  • Financial Performance:

    • Demonstrates operational efficiency with Rs 100 crore in net profit and robust cash reserves of Rs 1,000 crore.

  • Positive EBITDA Trend:

    • Continual positive EBITDA over eight quarters supports financial stability and growth prospects.

  • Strategic Funding Negotiations:

    • Ongoing talks with Khazanah Nasional underscore efforts to secure substantial funding.

  • Investor Confidence Validation:

    • Fitch's credit rating upgrade affirms long-term strategy despite recent valuation challenges.

  • Capital Raise Objective:

    • OYO aims to raise $570 million through bonds and family offices amidst a valuation adjustment of $2.5 billion.

  • Financial Performance:

    • Demonstrates operational efficiency with Rs 100 crore in net profit and robust cash reserves of Rs 1,000 crore.

  • Positive EBITDA Trend:

    • Continual positive EBITDA over eight quarters supports financial stability and growth prospects.

  • Strategic Funding Negotiations:

    • Ongoing talks with Khazanah Nasional underscore efforts to secure substantial funding.

  • Investor Confidence Validation:

    • Fitch's credit rating upgrade affirms long-term strategy despite recent valuation challenges.

oyo unlisted shares

Oravel Stays (OYO Rooms)

DRHP filed4.44%

Expert Analysis

OYO Set to Raise Rs 1,000 Crore from Family Offices, EGM Imminent.

Expert Analysis:

  • Fundraising Strategy: OYO is in advanced talks to raise Rs 1,000 crore ($120 million) from family offices, following the withdrawal and planned refiling of its DRHP to raise $450 million through dollar bonds with SEBI.

  • Valuation Adjustment: The proposed round is expected to value OYO at around $2.5 billion, which is still a far call from its 2021 valuation of $9 billion.

  • EGM Scheduled for OYO's Fundraiser Approval: OYO is set to convene an extraordinary general meeting on Tuesday to approve a fundraiser involving family offices like Anand Jain's, the Juneja brothers from Mankind Pharma, and Utpal Sheth, per The Economic Times.

  • Negotiations Underway: OYO, led by Ritesh Agarwal, nears final negotiations with Malaysia's Khazanah Nasional for a potential Rs 250-300 crore investment, supplemented by domestic investors, facilitated by Incred Wealth via a special purpose vehicle.

  • EGM to Review Initial Fundraising: The EGM will review an initial fundraising of approximately Rs 500 crore, with most contributions expected to range from Rs 15-30 crore, though some may be higher.

  • OYO Achieves Profitable Year and Positive Financial Milestones: Ritesh Agarwal shared on social media that OYO recorded its first profitable year with Rs 100 crore in FY24, alongside eight consecutive quarters of positive EBITDA and a cash balance of about Rs 1,000 crore.

Publisher:BT MARKET TODAY