Highlights
Oyo Secures Rs 550 Crore Funding from Redsprig Innovation Partners
Oyo, a leading player in the hospitality sector, has successfully raised Rs 550 crore (approximately $65 million) from Redsprig Innovation Partners, an affiliate of company founder Ritesh Agarwal. This major funding round showcases Oyo’s continued appeal to investors.
The board of Oyo has approved a special resolution to issue 12,91,07,982 equity shares at an issue price of Rs 42.6 each. This move is aimed at raising the targeted Rs 550 crore (or $65 million), as detailed in the company’s regulatory filing obtained from the Registrar of Companies.
Valuation Increase
Following this recent investment, Oyo’s valuation has surged to $3.79 billion, indicating a significant 59.2% increase compared to its previous Series G round, during which the valuation was recorded at $2.38 billion.
Use of Funds
The funds generated from this investment will be directed towards:
- Promoting growth and supporting global expansion initiatives, including acquisitions.
- Enhancing business strategies.
- Other corporate initiatives.
Additionally, this funding round is expected to result in a 1.728% dilution of the company’s overall stake.
Agarwal’s Continued Support
This marks the second significant capital infusion by Ritesh Agarwal into Oyo. In August 2024, he spearheaded a $175 million investment through his Singapore-based fund, Patient Capital.
In related news, a report from CNBC TV18 revealed that Nuvama Wealth & Investment Limited (previously known as Edelweiss Securities) acquired shares valued at Rs 100 crore in Oyo’s parent company, Oravel Stays Limited.
Financial Performance Overview
For the fiscal year 2024 (FY24), Oyo, which is preparing for an IPO, reported a stable revenue figure of Rs 5,389 crore, which is slightly lower than Rs 5,464 crore reported in FY23. Despite the lack of revenue growth, the company successfully managed to reduce its expenditures by 16%, which enabled Oyo to achieve a net profit after tax (PAT) of Rs 230 crore in FY24.
IPO Plans
In May 2024, the Gurugram-based company retracted its draft papers (DRHP) for the second time due to challenging market conditions. The firm has indicated its intention to refile the IPO documents once a substantial funding round is completed, and this latest funding is anticipated to facilitate that process.