Oyo Hotels & Home's Founder, Ritesh Agarwal, is currently conducting a share buyback program from the company's earliest investors including Lightspeed Venture Partners and Sequoia Capital. This buyback is an effort to increase Agarwal's overall ownership according to some sources.
The move, unprecedented among leading privately held, new-age Indian startups, will help Agarwal raise his stake to around 30% from the current 10%. This may go up to as much 32-33%, including the stakes held by the management and employees.
To finance the buyback, the 26-year-old founder has been in talks with financial institutions and banks in India, Japan and Europe to shore up $2 billion in secured debt, sources close to the matter said on condition of anonymity.
Oyo is expected to be valued at around $10 billion in what will be a mix of secondary and primary transactions, they said.
In an emailed response to ET’s queries, an Oyo spokesperson said, “As a company policy, we do not comment on industry speculation.”
Lightspeed and Sequoia didn’t respond to queries.
Agarwal is going to pledge his shares in the process of raising debt, said another source.
“While Agarwal will buy $1.5 billion worth of shares from Sequoia and Lightspeed, another $500 million will come in the form of primary capital. The primary part of the deal may see existing investors also pitch in,” said a person privy to the details. The $500 million in primary capital will go into the company’s coffers, he added.
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