Hospitality startup OYO is reportedly in an advanced stage to raise around Rs 1,000 crore ($120 million) from the family offices of top corporate honchos and market experts. This comes after OYO parent Oravel Stays withdrew its DHRP and is set to refile it with markets regulator SEBI as it plans to raise $450 million via sale of dollar bonds.
According to a report in The Economic Times, OYO is expected to hold an extraordinary general meeting on Tuesday to approve the fundraise. As per the report, the plan includes the family offices of corporate strategy advisor Anand Jain, Mankind Pharma promoter brothers Ramesh and Rajeev Juneja, as well as Utpal Sheth, close aide of late Rakesh Jhunjhunwala.
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.
The Ritesh Agarwal-helmed company is in the final negotiations with Malaysian sovereign wealth fund Khazanah Nasional, and is negotiating certain rights before finalising the deal.
The report, quoting sources, said that Agarwal may raise up to Rs 250-300 crore from Khazanah and the rest from domestic investors. Moreover, Incred Wealth is reportedly helping OYO pitch the fundraise to a group of high net-worth individuals through a special purpose vehicle.
The EGM will consider the initial fundraise of around Rs 500 crore. Most cheques, the report added, is expected to be of Rs 15-30 crore, but some might be more.
Ritesh Agarwal had said in a post on social media that the company clocked its maiden net profitable financial year at Rs 100 crore. “While a delighted customer or a hotel partner brings the biggest smile on my face, our first cut financials of FY24 have me humbled as well. We had our maiden net profitable financial year at nearly Rs 100 cr. This was our eighth consecutive quarter of a positive EBITDA and we also have a cash balance of about Rs 1000 cr,” he said adding that rating agency Fitch also upgraded their credit rating.