Oyo parent company Oravel Stays Ltd has filed a draft red herring prospectus with capital markets regulator SEBI to launch Rs 8,430-crore IPO.
Oyo parent company Oravel Stays Ltd has filed a draft red herring prospectus with capital markets regulator SEBI to launch Rs 8,430-crore IPO. The public issue comprises fresh issuance of shares worth Rs 7,000 crore and an offer-for-sale (OFS) worth Rs 1,430 crore by existing shareholders. The company said it would also consider issuing shares worth up to Rs 1,400 crore in a pre-IPO placement. The global coordinators and book running lead managers to the issue are Kotak Mahindra Capital Company, J.P.Morgan India Private Ltd, Citigroup Global Markets India Private Ltd, ICICI Securities, Nomura Financial Advisory and Securities and JM Financial Ltd. Link Intime India will be the registrar to the issue.
The promoters of the company are Ritesh Agarwal, RA Hospitality Holdings (Cayman)) and SVF India Holdings (Cayman) Ltd. The OFS comprises selling of shares worth up to Rs 1,328 crore by SVF India Holdings, up to Rs 51.6 crore by A1 Holdings Inc, up to Rs 23.1 crore by china Lodging Holdings (HK), and up to Rs 26.7 crore by Global Ivy Ventures LLP. There are no listed companies in India that engage in a business similar to that of Oyo. The weighted average return on net worth is 108.9 per cent.
Oyo has planned to utilise the net proceeds from the fresh issue towards prepayment or repayment, in part, of certain borrowings availed by the company’s subsidiaries worth Rs 2,441 crore, and towards funding organic and inorganic growth initiatives worth Rs 2,900 crore, and for general corporate purposes. Oyo in its DRHP said that going forward, as internet penetration increases further in countries like India, it is likely to result in higher consumption and transactions across industries and categories, as has been the case in the United States. Further, online penetration of travel in general and hotel booking specifically has been higher than most other categories. Given India’s relative under-penetration in this sector, it is likely to continue growing rapidly going forward.