SoftBank To Offload INR 1,328.5 Cr Worth Shares In OYO’s IPO

Long-time investor and the largest shareholder in the hospitality unicorn OYO, SoftBank will offload part of its stake in its proposed initial public offering (IPO).

SoftBank’s SVF India Holdings (Cayman) Ltd holds 46.62% shares in Oravel Stays, the parent company of hospitality unicorn. The OYO’s DRHP shows that SVF India Holdings will offload shares of up to INR 1,328.5 Cr through the offer for sale.

SVF India is promoted by SVF Holdings (UK) LLP. According to the DRHP filing, SoftBank Vision Fund L.P. holds 100% of the membership interests of SVF UK. The designated members of SVF UK are SVF Member (UK) Limited and SoftBank Vision Fund L.P. which is also the managing member, the DRHP reveals.

As the Gurugram-based startup has found itself in the middle of several controversies in the past few years, in several instances investment experts and market analysts have suggested that Masayoshi-led investment major should pull out of the company, but SoftBank has stayed put with its investments. 

Amid rising losses and several litigations against the startup, many even called OYO, the ‘Indian WeWork’, drawing an analogy with the US-based coworking major which suffered a major setback with a failed IPO in 2019. SoftBank has made a significant investment in the coworking service provider.

The much-anticipated IPO of Oravel Stays, which runs OYO, would lead to a partial exit of the Japan-based investment major from the unicorn.

The other existing investors who will dilute their stake include A1 Holdings Inc, China Lodging Holdings (HK) and Global Ivy Ventures LLP.

A1 Holdings Inc, which holds a 1.81% stake aims to sell a stake worth INR 51.6 Cr. While China Lodging Holdings (HK) Ltd will offload stake worth INR 23.13 Cr equity shares. It currently holds a 0.81% stake in the hospitality unicorn. 

The INR 1,430 Cr offer for sale (OFS) will also include — stake sale of up to INR 26.71 Cr by Global Ivy Ventures LLP, which currently has 0.94% stake in the company. 

The INR 8,430 Cr ($1.2 Bn) IPO will consist of a primary component which will include an issue of fresh shares worth INR 7,000 Cr along with the offer-for-sale.

Founded in 2013 by Ritesh Agarwal, OYO so far has raised close to $4.1 Bn from 26 investors. 

Agarwal, the CEO and Founder, who individually holds an 8.21% stake in the hospitality startup, won’t be selling his stake in the proposed IPO. RA Hospitality Holdings (Cayman), which is owned by Agarwal, holds a 24.94% stake.

In September, Inc42 had exclusively reported that OYO would give 4,333 bonus equity shares to 12 equity shareholders at a face value of INR 10.

OYO would have allotted 1,833 and 2,273 equity bonus shares to its founder Ritesh Agarwal and OYO’s holding entity RA Hospitality Holdings respectively. SoftBank has received 79 bonus equity shares, and Lightspeed Venture Partners has been allotted 49 bonus equity shares, along with other allottees.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.