Microsoft Corporation has picked up stakes worth USD 5 million (about Rs 37 crore) in OYO, bringing the company’s valuation over $9 billion. The issuance includes equity shares and compulsory convertible cumulative preference shares on a private placement basis by the latter, as per the regulatory filing by the hospitality chain. According to a return on capital filing by the company, Oravel Stays Private Limited, doing business as OYO Rooms, last month accepted the issue of equity shares and Series F2 compulsory convertible cumulative preference shares (Series F2 CCCPS) for “an aggregate consideration amounting to rupee equivalent of $4,971,650 to Microsoft Corporation on a private placement basis.” Oyo, under the deal, will issue five equity shares of the face value of Rs 10 each for cash at an issue price of Indian rupee equivalent of $58.490 per equity share. Similarly, 80 Series F2 CCCPS will be issued at a face value of Rs 100 each for can at an issue price of rupee equivalent of $58,490.
This development comes when reports suggest that OYO Hotels and Homes will be launching its initial public offering (IPO) in the coming months. Reportedly, the Gurugram headquartered company has set a timeline of September for filing its IPO prospectus. Earlier this month, the Ritesh Agarwal-led hospitality chain had raised a TLB (Term Loan B) funding of USD 660 million from global investors. The company said that it would use funds for repaying debts and other business investments. The offer was oversubscribed 1.7 times. OYO is backed by marquee investors like Sequoia Capital, SoftBank Vision Fund, Hero Enterprise and Lightspeed Ventures, among others.