Orawell Stages Private Limited, which operates Hospitality Unicorns OYO Hotels and Holmes has filed for ₹8,430 crore ($1.1bn) initial public offering (IPO) in which some of its investors, including SoftBank Group, will partially exit.
The issue will involve a primary capital increase of approx. ₹7,000 crore sales along with other investors ₹Shares worth Rs 1,430 crore.
SoftBank Group is selling shares of value ₹ ₹1,328.53 crore while Grab, which invested $100 million in Oyo in 2018, is selling approx. ₹Shares worth 51.6 crores.
Huazhu Hotels or China Lodging Holdings, which invested in 2017, is nearly selling ₹23.13 crores offered.
The family firm of Hero Group’s Sunil Munjal is also selling shares of ₹26.71 crores.
Oyo’s 27-year-old founder Ritesh Agarwal will not sell the shares. Other investors like Sequoia Capital and Lightspeed Ventures are also not selling shares in this IPO.
The company has also inducted Olympian Deepa Malik on its board as an independent director.
Other board members include Ritesh Agarwal, Lightspeed Venture Partners founder Bejul Somaiya, former Indigo Airlines chairman, Oyo’s former chief executive officer in India and South Asia, Aditya Ghosh, former Starbucks Troy COO Matthew Elsted and William Steve Albrecht, who Former Chief Executive Officer. According to draft papers, American Accounting Association K.
The bankers to the issue are Kotak Mahindra Capital, Citigroup, JP Morgan, ICICI Securities, Nomura, JM Financial and Deutsche Bank.
At present, Ritesh Agarwal holds 8.21% stake while an affiliated promoter firm RA Hospitality Holdings Cayman holds 24.94%.
In 2019, Agarwal bought back a portion of the shares from investors Sequoia Capital and Lightspeed Ventures through RA Hospitality Holdings. Sequoia Capital India Investment holds a 3.24% stake while Lightspeed Venture has a 2.74% stake in Orawell Stages.
Currently, SoftBank Group holds 46.62%, Grab holds 1.81%, Huazhu Hotels holds 0.81%, while the Munjal family holds 0.04% stake in the firm.
proceeds from value issue ₹Rs 2,441 crore will be used to pay off outstanding debt debt by its subsidiaries, which include Orawell Stays Singapore Pte Ltd, Orawell Hotels LLC and OYO Hospitality Netherlands BV, OYO Singapore and OHL.
As on July 2021, on a consolidated basis, the total outstanding borrowings with the firm was ₹4890.56 crore
For the financial year 2021, its total income was ₹4157.39 crore against ₹13413.27 crore a year ago. was at a net loss for the period ₹4102.28 crore against ₹11079.79 crore last year.
Oyo joins a wave of startups including Paytm, Nykaa, Exigo and PolicyBazaar that have applied for IPOs this year.
In a response to the filing, Orawell expanded its share capital. ₹1.17 Cr to ₹901 crore earlier this month.
Meanwhile, Oyo is fighting a legal battle in court against Jostel Hospitality Pvt Ltd, which runs Zoe Rooms. Oyo agreed to buy Zoe Rooms in 2015, but the deal fell through. Zostel had moved the Delhi High Court last month to restrain Oyo from making any changes in its cap structure, including the IPO.
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