Travel tech unicorn Oyo has gained shareholder approval to raise Rs 416.85 crore through the issuance of preference shares, as reported by the Economic Times. The approval was secured during an extraordinary general meeting (EGM) held on June 18, where shareholders voted overwhelmingly in favor of the resolution with a 99.99% majority.
This strategic move will increase Oyo’s authorized share capital from Rs 901.14 crore to Rs 1,341.14 crore, enhancing the company’s flexibility for future share issuances. Specifically, Oyo plans to issue 14.37 crore Series G compulsory convertible cumulative preference shares (CCPs) via private placement to InCred Wealth. Each preference share is valued at Rs 29, totaling the raised amount to Rs 416.85 crore.
Preference shares, according to Investopedia, are equity shares that pay dividends to shareholders before any dividends are paid to common stockholders. This financial strategy highlights Oyo’s ongoing efforts to attract investor confidence and strengthen its capital base amid a challenging market environment.
A source speaking to the Economic Times remarked, “This EGM marks an important milestone for Oyo. The company’s ability to raise funds and restructure its capital base underscores investor confidence in its long-term vision and prospects.”
The approval comes at a critical time for Oyo, as the company is reportedly seeking additional funding of Rs 1,000 crore from family offices. Notable backers for this round include Mankind Pharma promoters Ramesh and Rajeev Juneja, stock market expert Utpal Sheth, and Anand Jain, a senior executive from Reliance Industries.
Furthermore, last month, Oyo withdrew its application for an initial public offering (IPO), reflecting a strategic pivot towards private funding mechanisms in the near term. This decision underscores the company’s focus on securing private investments to support its growth and operational needs.
This successful funding initiative is expected to bolster Oyo’s financial stability, enabling it to navigate the current market challenges and continue its expansion plans.
