SUMMARY
- Oravel Stays seeks to raise $200M at a $4.5-$5B valuation for inorganic growth and expansion.
- OYO plans to refinance $450M debt, lowering interest rates and extending maturity to FY29.
- Achieving FY24 profit of ₹229.5 crore, OYO aims to expand in US and global markets.
Oravel Stays, the parent company of OYO, is reportedly in talks to raise additional capital at a higher valuation to support its inorganic growth strategy. As a leader in the hospitality industry, Oravel Stays is seeking to strengthen its market position through strategic expansion and investment.
Talks with private Indian investors and foreign institutional investors have reportedly begun, intending to raise $200 million (about ₹1,681 crores) at a valuation of between $4.5 and $5 billion as reported by Business Standard. As per Business Standard, a source stated, “The $350 Million is a contingency plan and may not be drawn”.
Meanwhile, OYO has been growing its US business since it opened in the area in 2019. Currently, the firm runs more than 320 hotels across 35 states. The business wants to add another 250 hotels by 2024, bringing the total number of US hotels to close to 100 in 2023.
The company supported by SoftBank intends to refinance $450 million of its outstanding debt, hoping to extend the loan maturity by three years to FY29 and reduce interest rates from 14% to 10–10.5%. It is also creating a $350 million drawable bridging facility as a precautionary step to supply short-term finance until the equity raise happens.
Hospitality service platform, OYO was founded in 2012 by Ritesh Agarwal to offer travelers from all over the world simple, inexpensive lodging options. India, Europe, and Southeast Asia are among the more than 35 nations where the company says it provides more than 40 integrated products and solutions.
By reducing labor costs and increasing revenue, the company was able to reduce its expenses and earn a profit in FY24. In contrast to the ₹1,286.5 crore net loss in the previous fiscal year, the firm reported a net profit of ₹229.5 crore in FY24.
