Chinese Hospitality Major H World Group Sells 0.15% Stake In OYO

Chinese hospitality major H World Group has reportedly divested 0.15% stake in traveltech startup Oyo.

The company sold the stake for around INR 75 Cr valuing the hospitality unicorn at around $6.5 Bn, news agency PTI reported.

The Chinese hospitality firm held 0.78% shareholding in Oravel Stays Ltd that runs OYO. It sold around 1 Cr shares to a number of UAE-based family offices and institutional investors in a series of transactions.

The transactions happened in multiple tranches primarily over the course of 2022. With these transactions, H World Group earned over INR 75 Cr.

After the completion of the sale, the holding of H World Group (HWG) has come down to 0.63% in Oyo, valued at over INR 300 Cr.

The traveltech unicorn is currently gearing up for its initial public offering (IPO). OYO first filed its draft red herring prospectus (DRHP) in September 2021. At that time, it planned to raise INR 8,430 Cr ($1.2 Bn) through the market listing.

However, after market regulator SEBI directed OYO to refile its DRHP, the hospitality major has filed the documents through the confidential pre-filing route and at a reduced size.

OYO’s IPO size has been reduced to $400-$600 Mn. The unicorn will raise the funds through issuance of fresh shares to repay its debt.

However, OYO’s financial situation has considerably improved. OYO told its employees in a recent town hall meeting that it turned cash flow positive in the quarter ended March 2023, thanks to increased booking across all key geographies, especially in Europe.

Credit rating agency Moody’s also said recently it expects OYO to remain on track to turn EBITDA positive (after ESOP expenses), on a full-year basis, for the fiscal year ending 31 March 2024.