Oravel Stays Ltd, parent company of OYO, recently bought Motel 6 and Studio 6, and is now in discussion to secure more investments to fuel its growth through acquisitions. This comes after its $525 million purchase of G6 Hospitality from Blackstone Real Estate, a big move into the US market.
Oyo acquires G6 Hospitality with over 320 hotels in US
With over 320 hotels in 35 states, OYO is rapidly expanding in the US. It added 100 hotels in 2023 and plans to grow by another 250 hotels next year.
According to Business Standard, OYO’s parent company, Oravel Stays, is talking to overseas and Indian investors to raise $200 million (about INR 1,681 crore) at an estimated valuation of $4.5-$5 billion. In August, OYO raised INR 1,457 crore (about $175 million) in a funding round led by Ritesh Agarwal’s Singapore-based entity, Patient Capital, accompanied by J&A Partners and ASK Financial Holdings.
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SoftBank-backed OYO to Refinance Debt
At that time, Patient Capital invested INR 830 crore, J&A Partners invested INR 120 crore, and ASK invested INR 14 crore. In addition, the SoftBank-backed company is seeking to refinance $450 million of its debt, aiming to lower interest rates from 14% to 10-10.5% and extend the loan maturity by three years to FY29. To be safe, it’s adding a $350 million bridge facility for interim funding until the equity raise happens. “The $350 million is a contingency plan and may not be drawn,” a source told BS.
Established in 2012 by Ritesh Agarwal, OYO, a hospitality service company extends easy-to-book, affordable accommodation globally. The company provides over 40 integrated products and solutions in more than 35 countries, including India, Europe, and Southeast Asia.
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OYO Plans to Launch IPO Next Year
Meanwhile, OYO plans to go public next year after delaying its IPO twice. The company will revise its draft red herring prospectus (DRHP) with SEBI once it refinances its $660 million Term Loan B. In FY24, they became profitable by reducing expenses and increasing revenue. The unicorn reported a net profit of INR 229.5 crore in FY24, compared to a net loss of INR 1,286.5 crore in the previous year.
Looking ahead, OYO plans to expand its premium offerings and international presence. Innov8, owned by the brand, has entered the office management space, similar to Awfis and Smartworks. Additionally, OYO is revamping its top leadership, promoting five executives in technology, product, strategy, operations, and distribution.
