Oravel Stays (OYO Rooms) Unlisted Shares

Oyo Raises $50 Million From Incred At 75% Valuation Haircut

NDTV Profit

2 min read

Oyo Raises $50 Million From Incred At 75% Valuation Haircut.

Expert Analysis:

Funding and Valuation Drop: Oyo, registered as Oravel Stays Ltd., raised Rs 416.8 crore (approximately $50 million) from Incred Wealth, a 75% valuation drop, valuing it at $2.4 billion compared to its peak worth of $9.6 billion. This investment grants Incred Wealth a 2.11% stake in the company.
Fund Utilization: Funds will be used for expansion, acquisitions, and general corporate purposes.
Valuation Decline from Peak: The valuation has dropped significantly from nearly $10 billion, when Oyo raised strategic capital from tech giant Microsoft in 2021.
IPO Withdrawal and SEBI Talks: The Ritesh Agarwal-led firm has withdrawn its IPO papers for a second time, citing unfavorable market conditions, despite discussions with SEBI for expedited approval that did not materialize.

Financial Performance: Oyo's last fiscal year was its first profitable year, with a profit of nearly Rs 100 crore, according to Founder and Chief Executive Officer Ritesh Agarwal, who had said that the company's cash balance is also about Rs 1,000 crore.

Global Growth Vision: CEO Ritesh Agarwal forecasts growth in India and key markets like the Nordics, Southeast Asia, the US, and the UK, fueled by emerging travel trends like premiumisation, spiritual travel, business travel, conferences, and destination weddings. And anticipates an even more exciting fiscal 2025.

Takeaways

Funding and Valuation:
- Oyo raised Rs 416.8 crore ($50 million) from Incred Wealth, valuing the company at $2.4 billion.
Stake Details:
- Incred Wealth gains a 2.11% stake in Oyo.
Usage of Funds:
- Funds aimed at expansion, acquisitions, and corporate purposes.
Financial Milestone:
- Despite withdrawing its IPO plans due to market conditions, Oyo had its first-ever fully profitable year with nearly Rs 100 crore in profit and Rs 1,000 crore in cash balance.
Growth Optimism:
- CEO Ritesh Agarwal is optimistic about growth in India and key international markets.

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