IPO-bound Oyo raises $5 mn from Microsoft at $9.6 bn valuation

Microsoft has pumped in around $5 million (around Rs 37 crore) in Oyo, valuing the IPO-bound hospitality firm at $9.6 billion. 

The investment will be done through the issuance of equity shares as well as compulsory convertible cumulative preference shares on a private placement basis, according to a regulatory filing by Oyo.

One of India's most valuable startups, Oyo has aggressively expanded to several global markets comprising Europe, US and Southeast Asia in recent years. 

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The issue of equity shares and Series F2 compulsory convertible cumulative preference shares (Series F2 CCCPS) was approved on July 16 at an extraordinary general meeting of Stays Pvt Ltd (OYO), which runs the OYO Rooms chain of hotels. 

The approval was given for "an aggregate consideration amounting to rupee equivalent of $4,971,650 to Microsoft Corporation on a private placement basis", as per an RoC filing by the company.

Under the deal, OYO will issue 5 equity shares of the face value of Rs 10 each for cash at an issue price of India rupee equivalent of $58,490 per equity share.

Moreover, the meeting approved the issue of 80 Series F2 CCCPS of the face value of Rs 100 each for cash at an issue price of rupee equivalent of $58,490 per Series F2 CCCPS.

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The Series F2 CCCPS are issued at a minimum preferential dividend rate of 0.01 per cent per annum and will have priority with respect to repayment of capital vis-a-vis equity shares of the company, the filing said.

The terms of the Series F2 CCCPS for all purposes are covered under the "Shareholders' Agreement" dated July 29, 2019, executed amongst the company, Microsoft Corporation, Ritesh Agarwal, and certain other parties (as may be amended, supplemented, superseded, or replaced from time to time), it added.

In July, OYO had announced raising TLB funding of $660 million (nearly Rs 4,920 crore) from global institutional investors to be utilised for paring debt and other business investments. TLB refers to a tranche of senior secured syndicated credit facilities from global institutional investors.

(With inputs from PTI.)

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