Oyo in Talks to Secure ₹1,000 Crore from Prominent Investors

According to The Economic Times, citing sources familiar with the matter. Oyo is reportedly in discussions to secure approximately ₹1,000 crore from the family offices of prominent Indian corporate executives and stock market experts.

Key potential investors include corporate strategy advisor Anand Jain, Mankind Pharma promoter brothers Ramesh and Rajeev Juneja, and Utpal Sheth. It’s a close associate of the late market expert Rakesh Jhunjhunwala.

Background of the Issue:

This fundraising effort comes after Oyo withdrew its application for an initial public offering (IPO) last month. The company is scheduled to hold an EGM this week to approve the fundraising, having increased its authorized share capital.

Valuation and Investors of Oyo:

Oyo is expected to be valued at around $2.5 billion in this fundraising round, a significant decrease from its peak valuation of $9 billion in 2021. The company is also reportedly nearing the completion of negotiations with Malaysia’s sovereign wealth fund, Khazanah Nasional.

Oyo Fundraising Details:

• Order Book: The order book from family offices is estimated at around ₹1,000 crore.
• Initial Fundraising: Oyo plans to consider an initial fundraising of approximately ₹500 crore.
• Total Funding: The total funding is expected to be finalized by the end of the month.
• Credibility: Allocating a portion of the funds to Khazanah Nasional is seen as a strategic move to enhance the credibility of Oyo’s capital table.

Significance:

The involvement of high-profile investors and a sovereign wealth fund like Khazanah Nasional can significantly bolster Oyo’s market position and credibility, especially after the challenges it faced leading to the withdrawal of its IPO. The reduced valuation reflects the company’s recent performance and current market conditions.

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