Founder Ritesh Agarwal to invest ₹550 crore, valuing OYO at $3.8 billion: Sources

Hospitality firm Oyo’s founder and chief executive officer (CEO), Ritesh Agarwal is set to invest ₹550 crore to increase his shareholding in OYO, sources have told CNBC-TV18, adding that Agarwal is slated to buy another $60 million worth of shares from the company at ₹42.60 per share, a 45% premium to his last purchase in August 2024.

The investment will be made via Agarwal’s affiliate entity, Redsprig Innovation Partners, and will value the company at around $3.8 billion, sources added. Agarwal had earlier also led Series G funding round in the Softbank-backed company with an investment of ₹830 crores and had bought $100 million worth shares.

The funding round had seen participation from various family offices and private investors such as InCred Wealth, J&A Partners – the family office of Mankind Pharma promoters, ASK Financial Holdings and star investor Ashish Kacholia.

With the current two purchases, Agarwal’s shareholding will increase to 32% from 30% held earlier. The additional funding will help in financing Oyo’s recent acquisition of the U.S.-based hospitality chain Motel 6 and Studio 6, sources told CNBC-TV18.
The firm in September announced the acquisition of G6 Hospitality, a lodging franchisor and parent company of the iconic Motel 6 and Studio 6 brands from Blackstone Real Estate for around $525 million, in an all-cash transaction.

Agarwal’s proposal will be taken up during the company’s extraordinary general meeting (EGM) on December 9 as a special resolution.

OYO had achieved a net profit (PAT) of ₹158 crore in Q2 FY25, following a profit of ₹132 crore in Q1. This brings the company’s H1 FY2025 net profit to ₹291 crore ($35 million), marking a significant turnaround from the ₹91 crore net loss reported in the same period of the previous fiscal year.

In Q2 FY25, OYO’s revenue increased to ₹1578 crore ($190 million), a substantial increase from the ₹1,413 crore ($170 million) reported in Q1. This represents a quarter-on-quarter growth of nearly 12%, indicating strong momentum in the company’s operations.

Its EBITDA in Q2 rose to ₹266 crore ($32 million), a 27.4% increase from the ₹174 crore ($21 million) reported in Q1. The company is expected to cross ₹2,000 crore in EBITDA in FY25-26.

Earlier in this year OYO reported its first-ever profit after tax (PAT) of ₹229 crore in FY2024, according to the company’s annual report. The company also reported eight consecutive quarters of positive Adjusted EBITDA. OYO’s Adjusted EBITDA grew by 215% to reach ₹877 crores in FY24, up from ₹277 crores in FY23.