OYO expands its authorized share capital with an eye on IPO

The increase was approved at the September 1 extraordinary general meeting held over video conferencing, the company said in a September 5 regulatory filing. mint.

The company is looking to allot close to 97 Series F2 cumulative compulsorily convertible preference shares (CCCPS) to Salesforce Ventures, it was announced in a separate regulatory filing with the Ministry of Corporate Affairs (MCA) on the same date.

The term “shareholders’ agreement” shall mean the agreement of shareholders of the Company which shall enter into force and shall be effective before the following two dates: (i) the allocation of 80 Series F2 CCCPS to Microsoft Corporation; or (ii) the 97 Series to Salesforce Ventures LLC Allotment of F2 CCCPS (as may be amended, supplemented, substituted or changed from time to time),” Oyo Said in the second filing.

“As a leading travel tech company, we regularly receive interest from strategic and financial investors. However, till date there has been no such investment or transaction that you are referring to,” an OYO spokesperson said about the allocation to Salesforce Ventures.

Salesforce India did not respond mintQuestions till press time. Salesforce Ventures could not immediately be reached for a comment.

Last month, OYO issued 80 Series F2 CCCPS shares near the face value of ₹Tech giant Microsoft at an issue price of Rs 58,490 equivalent to Rs 100 per Series F2 shares. The investment is expected to value OYO at $9.6 billion, mint informed earlier. If similar pricing is followed, Salesforce Ventures’ investment in Oyo could go up to $5.67 million.

“These are large strategic investors who come in the pre-IPO stage. The terms and conditions of such transactions are generally kept confidential,” said a banker working closely with the firm on condition of anonymity.

The expansion of the authorized capital comes at a time when OYO is actively exploring a $1.2 billion IPO on Indian exchanges by early 2022, with bankers such as JP Morgan, Citi and Kotak Mahindra Capital helping the issue. Conversation has started.

“It is a standard practice where compulsorily convertible preference shares of investors are required to be converted into equity shares before a major liquidity event. Therefore, the authorized capital needs to be increased before a company files its draft prospectus with the Securities and Exchange Board of India and also makes room for retail investors while going public. Based on the subscription agreements, equity shares will be issued to investors,” said Amarjit Singh, senior international tax and regulatory partner, KPMG India.

OYO raised $660 million in debt funding in July from global institutional investors, including Fidelity Investments, through the Term B loan route.

OYO’s list of aspirations comes at a time when several startups are making a foray into the public markets. The second half of this year is expected to see unicorns including beauty marketplace Nykaa, Insurtech and lending platform PolicyBazaar, logistics major Delhivery and financial major Paytm list on Indian exchanges.

“The recent listing is giving more confidence to large Indian investors to come up as anchor investors during the pre-IPO stages. Moreover, with the listed Indian tech startups continuing to grow, the interest of Indian anchor investors is only expected to increase,” Singh said.