“Ritesh holds roughly 33 per cent stake and would not be diluting. The large institutional investors would also dilute very little. About 75-80 per cent will be fresh equity or primary issuance. Most investors could substantially stay on board,” said a person familiar with the matter, while another added: “Airbnb and Greenoaks Capital are unlikely to divest their stakes.”
Oyo and Airbnb declined to comment. Greenoaks did not respond to an email seeking comments till the time of going to press.
ET had reported in its edition dated September 23 that Oyo is planning to raise around $ 1 billion through an initial public offering (IPO) and is expected to file its draft red herring prospectus (DRHP) next week.
People familiar with matters said the company would look at a ‘relatively conservative’ price and wants to leave enough on the table for incoming investors. “There is significant alignment on that,” one of them said.
Oyo increased its authorised share capital to Rs 901 crore earlier this month from Rs 1.17 crore. It has expanded its paid-up share capital through a stock split and bonus issue.
The stock’s face value has been split into a 1;10 ratio for equity and preference shares. Oyo has also allotted 3,999 bonus shares for each share held. For preference shareholders, the conversion ratio to equity shares has changed to 1:4,000 from 1:1 earlier.
The bonus allotment was made to 15 equity shareholders including founder Agarwal, SoftBank, Lightspeed Venture Partners, Microsoft, Oravel Employee Welfare Trust and Sequoia Capital.
Almost the entire portfolio of Oyo Hotels & Homes has moved to a revenue share model as the company did away with minimum guarantee agreements following the Covid-19 pandemic. It has done away with putting any capex in hotels as well.
The company classifies India, Indonesia, Malaysia and European Homes as its core growth markets. They make up 90 per cent of its ‘storefronts’ and it plans to focus on them for the next three to four years. Oyo operates around 157,000 storefronts globally. Around 64 per cent of its hotels are in India according to people familiar with developments.
