OYO increased authorized share capital before IPO

Sources familiar with the matter told PTI that the move comes ahead of the proposed initial public offering (IPO) by OYO, for which a draft Red Herring Prospectus (DRHP) is likely to be filed in the next few months. .

According to a Registrar of Companies (ROC) filing by the company, an extraordinary general meeting of Orwell Stages Private Limited (OYO) on 1st September approved the proposal to increase its authorized share capital.

Authorized capital is the maximum amount of capital that a company is allowed to issue at any given time.

The increase in the authorized share capital of the company is from the existing ₹from 1,17,80,010 ₹9,01,13, 59,300, the company said in a regulatory filing.

In the forerunner of the IPO, Oyo It raised fresh capital from Microsoft in August at a post-money valuation of US$9.6 billion.

Tech giant Microsoft Corporation has invested around USD 5 million in Oyo through issuance of equity shares and compulsory convertible cumulative preference shares on a private placement basis, the hospitality chain said in a regulatory filing.

Earlier in July, it raised USD 660 million from global institutional investors through the B loan route, which included refinancing Fidelity Investments and simplifying its existing lending.

Sources said OYO has initiated discussions with investment banks such as JP Morgan, Citi and Kotak Mahindra Capital to manage its USD 1.5 billion public issue.

Comments could not be obtained from the company at the time of filing the story.

The company has moved away from the Minimum Guarantee (MG) model seen by 2019 to a revenue sharing model, and has moved to an automated and simplified twice a week settlement of dues with its hotel partners.

OYO has previously raised funding rounds from marquee global venture capital funds such as SoftBank, Sequoia, Lightspeed Venture Partners, Hero Corporate and leading global consumer tech companies such as DiDi, Grab and Airbnb.