{"id":32957,"date":"2019-07-20T20:09:25","date_gmt":"2019-07-20T14:39:25","guid":{"rendered":"http:\/\/officechai.com\/?p=32957"},"modified":"2019-07-20T20:09:25","modified_gmt":"2019-07-20T14:39:25","slug":"oyo-rooms-doubles-valuation-10-billion-ritesh-agarwal-buys-back-shares","status":"publish","type":"post","link":"https:\/\/officechai.com\/startups\/oyo-rooms-doubles-valuation-10-billion-ritesh-agarwal-buys-back-shares\/","title":{"rendered":"Oyo Rooms Doubles Valuation To $10 Billion After Ritesh Agarwal Buys Back Shares"},"content":{"rendered":"

For a company that wasn’t even worth $1 billion until 10 months ago, the journey to becoming India’s most valuable startup has been breathtaking to say the least.<\/span><\/p>\n

Oyo Rooms is now valued<\/span> <\/a>at $10 billion after founder Ritesh Agarwal bought back shares worth $2 billion from existing investors. With the share purchase, Ritesh Agarwal, all of 25 years old, has raised his stake in his company from 9.62 percent to nearly thirty percent. The shares were bought back from long-term Oyo investors Sequoia Capital and Lightspeed Venture Partners.\u00a0<\/span><\/p>\n

\"oyo<\/span><\/p>\n

The share buyback was through an entity called RA Hostpitality Ventures (the RA stands for Ritesh Agarwal’s initials) which is registered in the Cayman islands. Ritesh Agarwal, who already owned nearly $500 million in Oyo shares, has borrowed\u00a0an additional $2 billion from “global institutional banks and his financial partners”, to raise his stakeholding in the company he’d founded. With Agarwal now owing 30% of Oyo, he has a greater say in the running of the company, and potentially, a greater payout if and when Oyo goes public.<\/span><\/p>\n

There have been some eyebrows raised over the $2 billion share purchase though. Ritesh Agarwal owned nearly 10 percent of Oyo before the deal, making his Oyo shares worth nearly $500 million. For institutional investors to have lent him $2 billion with a collateral of just $500 million isn’t a deal that’s common in Indian circles, especially in the equity markets.<\/span><\/p>\n

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On this OYO transaction: confusing. <\/p>\n

Ritesh owns 10% increasing to 30% via debt. So he owns USD 1B worth of unlisted single co shares & someone is loaning him 2B against that to increase stake.
My Q: Who is the lender, is its stock listed in India and does it hv listed futures?<\/p>\n

— Samir Arora (@Iamsamirarora) July 20, 2019<\/a><\/p><\/blockquote>\n