Oyo, the globally recognized budget-hotel chain, is reportedly in the process of securing a fresh injection of capital, ranging from $100 million to $125 million. This funding round, according to a TechCrunch report citing sources, comes with a revised market valuation of $2.5 billion for the company. While Oyo has yet to officially confirm the report, the news marks a significant development for the company.
Last month, Oyo announced its intention to refile its initial public offering (IPO) papers with the Securities and Exchange Board of India (SEBI). This move follows the successful refinancing of the company’s existing $450 million Term Loan B at a lower interest rate. Oyo expects this refinancing to generate significant annual cost savings – an estimated $8-10 million in the first year and a projected $15-17 million annually thereafter.
The company has demonstrated a turnaround in its financial performance, registering its first profitable financial year in 2023-24 with a net profit of Rs 100 crore. Oyo’s Founder and CEO, Ritesh Agarwal, highlighted this achievement on X, emphasizing the company’s eighth consecutive quarter of positive EBITDA and a robust cash balance of around Rs 1,000 crore.
The positive trajectory of Oyo’s performance has attracted attention from global credit rating firm Fitch, which recently upgraded the company’s credit rating. Agarwal expressed optimism about the future, stating, “FY25 will clearly be even more exciting.”
