OYO raising funds from founder Ritesh Agarwal at ₹32,000cr valuation
What's the story
Ritesh Agarwal, the founder and CEO of OYO, is looking to invest ₹550 crore into the hospitality chain. This will increase his stake from 30% to 32%.
The investment entails the purchase of over 12.9 crore shares at ₹42.60 each, giving OYO a valuation of nearly ₹32,000 crore.
The decision will be discussed at an extraordinary general meeting (EGM) on December 9 as a special resolution.
Growth strategy
Agarwal's investment to fuel OYO's global expansion
The money from Agarwal's investment will be utilized to fund OYO's latest acquisition of US-based hospitality chains Motel 6 and Studio 6.
In September, OYO had announced the acquisition of G6 Hospitality, the parent company of these iconic brands, from Blackstone Real Estate for $525 million in an all-cash deal.
The acquisition is part of OYO's continued expansion in the US market since its 2019 launch in the region.
Market presence
US expansion and future plans
Currently, OYO has more than 320 hotels across 35 states in the US.
In 2023 alone, it added almost 100 hotels to its US portfolio. The company has set an ambitious target to expand its footprint further by adding around 250 hotels this year.
Agarwal's proposed investment is at a premium of 45% in comparison to his last purchase in August this year during the Series G round, where he invested ₹830 crore into the company.
Financial health
OYO's recent funding round and financial performance
OYO's latest $175 million funding round was led by Agarwal and saw participation from family offices and private investors like InCred Wealth, J&A Partners, ASK Financial Holdings, and star investor Ashish Kacholia.
The company posted a net profit of ₹158 crore in the September quarter, up from ₹132 crore in the June quarter.
Its net profit for the first six months of FY25 was ₹291 crore versus a net loss of ₹91 crore in the year-ago period.