IPO-bound hospitality unicorn Oravel Stays which runs OYO plans to utilise nearly 29% of its net proceeds from the IPO to repay part of the borrowing availed by its subsidiaries.
The repayment or prepayment of debt would amount to INR 2,441 Cr, as per the DRHP. Earlier today, Oravel Stays filed the draft red herring prospectus (DRHP) to raise INR 8,430 Cr through an initial public offering (IPO).
The net debt of Oravel Stays at the end of the financial year 2020-21 stood at INR 2,848.79 Cr, showed the filings made with the regulator.
Its key subsidiaries — OYO Hotels and Homes Pvt Ltd, OYO Apartment Investments and OYO Apartment Investments have net assets worth -INR 49.85 Cr, -INR 22.96 Cr, -INR 28.58 Cr respectively. OYO Hospitality (UK) has reported a net asset of -INR 490.9 Cr as of March 31, 2021.
It plans to mobilise another INR 2,900 Cr towards organic and inorganic growth initiatives and the rest will be put into general corporate purposes.
The documents showed that the IPO offer will consist of a primary component which will include an issue of fresh shares worth INR 7,000 Cr and an offer-for-sale, meaning allowing existing investors to offload their shares, amounting to INR 1,430 Cr.
The startup and its stakeholders may, in consultation with lead managers, consider a further issue of equity shares “Pre-IPO placement” for cash consideration aggregating up to $193 Mn.
The Pre-IPO placement, if undertaken, will be at a price to be decided by the company and its stakeholders in consultation with the Lead Managers and the Pre-IPO placement will be undertaken prior to the filing of the Red Herring Prospectus with the ROC.
Founded in 2013 by Ritesh Agarwal, OYO last raised $5 Mn from US tech giant Microsoft at a valuation of $9 Bn. In July 2021, the hospitality giant closed $660 Mn in term loan funding from global institutional investors.
The hospitality unicorn is backed by investors such as SoftBank, NASDAQ-listed Airbnb, Lightspeed Venture Partners, Innoven Capital, among others. The startup to date has raised $4.1 Bn from 26 investors across 19 rounds.
The company has 159 trademark registrations in India which include, OYO Hotels, OYO Inns, OYO Rooms, StudioStays, OYO Townhouse, Autoparty, Weddingz.in, OYO Money, SilverKey, Workflow by OYO, PowerStation by OYO, OYO Homes, OYO BumbleWhammy and OYO WokeSoap.
OYO is the fourth Indian travel and hospitality startup heading for IPO. While EaseMyTrip got listed earlier this year, Delhi NCR based ixigo and Rategain have filed DRHPs with SEBI for IPO.