Oyo to raise Rs 413 crore through a rights issue
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Budget hotel aggregator Oyo (Oravel Stays Pvt. Ltd) is looking to raise over Rs.413 crore through a proposed rights issue of shares to its existing shareholders, according to documents filed with the Registrar of Companies said a report in the Mint.
The company did not respond to an email till the filing of the report.The company last raised $100 million in a Series B funding round led by Japan’s SoftBank Group with participation from existing investors Greenoaks Capital, Sequoia Capital and Lightspeed Venture Partners.
Oyo is also looking to buy back shares from existing investors for around Rs 60 crore. The document did not disclose the names of the stakeholders.“The buy back is being undertaken by the company to provide liquidity to the shareholders. Additionally the buy back would result in enhancing shareholders confidence,” the document said.
The development was first reported by The Economic Times on Friday.The move comes at a time when the market has dried up and companies are finding it difficult to raise money at their preferred valuations or rope in new investors.
Competitor Stayzilla, raised over $13 million in a Series C round of funding from existing investors Matrix Partners and Nexus Ventures in May.Earlier this year, food delivery start-up Swiggy (Bundl Technologies Pvt. Ltd) also raised Rs 230.34 crore with a large chunk of money coming in from existing investors SAIF Partners, Accel Partners, Norwest Venture Partners and Apoletto Asia Ltd.
While it could not be ascertained where Oyo would spend this money, the company of late has been experimenting with multiple new categories.
The budget hotel accommodation aggregator has started offering holiday packages consisting of transport, assisted services and local activities, besides stay, across its leisure destinations.
It entered the hotel leasing business under a programme called Oyo Flagship. It allows the company complete control over day-to-day operations of these establishments helping it improve customer experience.
It has also forayed in other segments, wherein it offers services beyond plain accommodation, for events like weddings, long stays, conferences and internships.
Oyo has been operating in more than 170 Indian cities, including major metros, regional hubs, leisure destinations as well as pilgrimage towns.
In January, it started operations in Malaysia, the company’s first venture outside its home market.
The company currently claims to have 68,300 rooms across 5,855 partner hotels in India and targets to triple the inventory by 2016-end.
Earlier this year, SoftBank, in its earnings report, said that the daily booked room nights for hotel rooms aggregating platform Oyo Rooms grew 15 times in the quarter ended 31 March as against the same period a year ago.
