Hospitality Unicorn OYO Secures INR 550 Cr from Ritesh Agarwal’s Redsprig Innovation

OYO has raised INR 550 crore (about $65 million) from Redsprig Innovation Partners, founded by Ritesh Agarwal.

Redsprig Innovation is a venture financing business led by Agarwal. Media reported in November last year that Agarwal planned to extend his share in the company with an INR 550 crore financial infusion.

OYO, founded in 2012 by Ritesh Agarwal, is a hospitality firm that promises to offer over 40 integrated goods and solutions to patrons who manage more than 157K hotels and home stores in 35 countries, including India, Europe, and Southeast Asia.

According to OYO’s filings with the corporate affairs ministry, the company issued 12.91 crore equity shares at an issue price of INR 42.6 per to attract funds.

Related: OYO Buys American Motel 6’s Arm G6 Hospitality for $525 Mn

OYO intends to use the cash to accelerate growth, support worldwide expansion objectives (including acquisitions), improve business strategy, and conduct other corporate activities. The new share issuance will dilute the company’s total interest by 1.728 percent.

The recent fundraising round marks Agarwal’s second big capital infusion into the company. In August last year, Agarwal’s Singapore-based fund, Patient Capital, spearheaded OYO’s $175 million investment round.

Last month, Nuvama Wealth & Investment Limited (previously Edelweiss Securities) purchased OYO shares worth INR 100 crore on behalf of a group of family offices. A source at the time told media: “The company’s recent profitability has sparked significant interest in the market, which has further caught the attention of many potential buyers.”

Moody’s, the global rating agency, has increased OYO’s corporate family rating from “B3” to “B2”.

On the financial front, OYO achieved profitability in the fiscal year 2023-24. It made a net profit of INR 229.5 crore during the year, compared to a net loss of INR 1,286.5 crore in the previous fiscal year. However, its operating revenue remained nearly flat during the year under review.

In FY24, revenue from operations was INR 5,388.7 Cr, down 1.3% from INR 5,463.9 Cr the previous fiscal year.

The corporation also maintained profitability in the first two quarters of the current fiscal year. It made a profit of INR 158 crore in Q2 FY25 and INR 132 crore in Q1 FY25.