IPO-bound OYO raises authorised share capital to Rs 901 cr

Oravel Stays Pvt. Ltd, which runs OYO Hotels Homes, has approved an increase in the latter's authorised share capital from Rs 1.17 crore to Rs 901 crore ahead of its IPO (initial public offering), as per a regulatory filing by the hospitality firm. 

On September 1, Oravel Stays, at an extraordinary general meeting, had given its nod to the resolution to increase OYO's authorised share capital, according to a Registrar of Companies (RoC) filing by the company. 

Authorised capital is the maximum capital amount a company is permitted to issue at any point of time. 

Also Read: OYO to employ over 300 tech professionals to expand tech, product teams

The move comes ahead of the proposed IPO by Softbank-backed OYO, for which a draft red herring prospectus (DRHP) is expected to be filed in the next few months, sources told PTI.

In a precursor to the IPO, OYO in August raised fresh capital from Microsoft at a post-money valuation of $9.6 billion.

Tech giant Microsoft Corporation has invested nearly $5 million in OYO through the issuance of equity shares and compulsory convertible cumulative preference shares on a private placement basis by the latter, the hospitality chain had said in a regulatory filing.

Earlier in July, it raised $660 million through the term B loan route from global institutional investors, including Fidelity Investments to refinance and simplify its existing borrowings.

Also Read: OYO plans to launch IPO by year-end; to file DRHP by Sept

OYO has initiated discussion with investment banks like JP Morgan, Citi and Kotak Mahindra Capital to manage its $1.5 billion public issue slated to raise between $1.2-1.5 billion at a valuation range of $14 to 16 billion, sources said.

The company has moved away from minimum guarantee (MG) model seen up until 2019, to a revenue sharing model, and has shifted to an automated and simplified twice a week dues reconciliation with its hotel partners.

OYO has earlier raised funding rounds from marquee global venture capital funds like Softbank, Sequoia, Lightspeed Venture Partners, Hero Corporate and leading global consumer tech companies like DiDi, Grab and Airbnb.

(With inputs from PTI.)