In what comes as the biggest stock buyback by an Indian businessman, Oyo founder Ritesh Agarwal has set in motion the process of increasing his stake by buying back shares in his own company. Ritesh Agarwal (RA) Hospitality Holdings, a company he set up in the Cayman Islands, has signed a two billion dollar primary and secondary management investment round in Oyo Hotels & Homes.
Though he is the group's CEO, Ritesh holds less than 10 per cent shares in the company he founded just six years ago and took to global success. Through these two rounds of investment, he intends to raise it to above 30 per cent.
Present shareholders, including SoftBank which holds the biggest chunk at about 48 per cent, are in agreement with this move. “I am deeply humbled and delighted to have gotten the support of all our investors, the board and above all the institutionalised financial partners,” said Agarwal.
According to reports, RA Hospitality Holdings will do two rounds of management investments – a primary round of $700 million via debt and equity as well as a secondary round of money to buy back shares held by equity investors Sequoia Capital (5 per cent out of their total 10 per cent) and Lightspeed Venture Partners (5 per cent out of total 10 per cent).
Oyo, which started off as an aggregator of hotels and graduated into managing properties not just in India but across many countries, is now considered India's biggest, and the world's fastest growing, chain of hotels, homes and living spaces. It has ten lakh rooms under its watch globally, two lakh of them in India. Its revenues grew 4.4 times year-on-year as of last month (compared to June last year).