Ritesh Agarwal-led OYO in talks to raise Rs 1,000 crore from the Indian family offices, says Report

Shark Tank India judge Ritesh Agarwal-led OYO is reportedly in the advanced stages of raising approximately Rs 1,000 crore (or about $120 million) in funding from the family offices of prominent Indian corporate executives and stock market experts.

According to an ET report, Among the notable investors are Anand Jain, a corporate strategy advisor and former senior executive at Reliance Industries; Ramesh and Rajeev Juneja, promoters of Mankind Pharma; and Utpal Sheth, a close associate of the late market expert Rakesh Jhunjhunwala.

At what valuation?

The report said the funding would value the traveltech giant at around $2.5 billion, a substantial decrease from its peak valuation of $9 billion in 2021, representing a 72% drop. 

The company will hold an extraordinary general meeting (EGM) on Tuesday to approve the fundraise after increasing its authorised share capital.

OYO in talks with Khazanah Nasional

The report further said that the Ritesh Agarwal-led company is also in the final stages of negotiations with Khazanah Nasional, the Malaysian sovereign wealth fund.

The discussions are focused on securing certain rights before finalizing the deal. It is reported that OYO may raise between Rs 250-300 crore from Khazanah, with the remaining funds coming from domestic investors.

Is OYO profitable?

In a recent post on X, Ritesh Agarwal announced that OYO has recorded its first full-year net profit in its 12 years of existence. CEO Agarwal said that the company made a profit after tax of nearly Rs 100 crore in the financial year 2023-24. This is a big achievement for OYO, given that it reported a loss of Rs 1,286.5 crore in the previous fiscal.

The company has projected a gross booking value of $1.8 billion for FY25, up from $1.2 billion in FY24. For FY25, the company has forecasted revenue of $957 million, compared to $657 million in FY24.

Despite challenges posed by the pandemic, It has restructured its business and regained demand. In India, it focuses on hotel aggregation services, while in Europe, it has a significant presence in the home rental market, largely due to its acquisition of Amsterdam-based Leisure Group in 2019.

OYO has 95% of its storefronts in key growth markets, including India, Europe, Malaysia, and Indonesia.

Focused on expansion

Ritesh Agarwal earlier said OYO is focusing on India as well as key international markets like the Nordics, Southeast Asia, the US, and the UK.

The company added about 5,000 hotels and 6,000 homes globally in FY24.

Emerging travel trends such as premiumization, spiritual travel, business travel, conferences, and destination weddings are expected to drive further growth.