Oravel Stays (OYO Rooms) Unlisted Shares
OYO in talks to raise Rs 1,000 crore from family offices; EGM expected soon
BT MARKET TODAY
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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.
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.
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