Heaptalk, Jakarta — Hotel chain company OYO landed an equity fund worth US$50 million, approximately Rp810 billion, led by InCred Wealth, one of India’s Asset Management firms.
This fundraising garnered an order book of around US$120 million, with an offer being oversubscribed 2.5 times, reflecting market confidence in OYO’s growth trajectory. The accomplishment of capital infusion comes at a strategic time for the company, as it continues to amplify its position in the hospitality industry technology industry.
Concurrently, OYO has also received shareholder approval to increase its authorized share capital from US$108 million to US$161 million. This strategic move gives the company greater flexibility to issue new shares as it pursues future growth opportunities.
“This strategic step can provide flexibility for OYO to offer new shares to pursue opportunities in the future. Seeing the positive interest and sentiment towards OYO’s development, the company will also consider funding in smaller amounts shortly,” the Management team of OYO said.
In addition to the equity fundraising, OYO is close to finalizing its refinancing plans. The
company aims to raise to US$450 million via the sale of dollar bonds, which is expected to lead to an annual interest saving of US$15 million. This refinancing strategy underscores OYO’s approach to optimizing its capital structure and reducing financing costs.
An increased turnover performance of OYO
Before securing this investment, the company reported its maiden net profitable year in FY24, posting a profit after tax (PAT) of approximately US$12 million. Global rating agencies have also recognized OYO’s improving financial profile, with Fitch upgrading the company’s ratings and Moody’s maintaining a positive outlook.
Besides, Fitch Ratings upgraded the company’s Long-Term foreign local-currency Issuer Default Ratings to B, compared to the former of B- following its profitable year. Fitch also upgraded OYO’s senior secured term loan facility to B from B-, citing the company’s improving financial profile driven by sustained EBITDA growth and a recent US$195 million debt buyback.
Moody’s rated OYO B3 corporate family rating (CFR), citing sustained focus on cost control, along with expected business growth that will continue to drive earnings improvement, expecting OYO’s EBITDA will increase to $125 million, including ESOP expenses in FY 24-25.
Following this investment, this hospitality company will appoint Sumer Juneja, Managing Partner and Head of EMEA and India Investing at SoftBank Vision Fund, as a non-executive director on its board.
