Ritesh Agarwal to buyback $2 bn share buyback

Ritesh Agarwal, Founder and Chief Executive Officer of Oyo Hotels and Homes, has planned to invest $2 billion to buy back a part of the equity holdings of the company’s early investors Lightspeed Venture Partners and Sequoia India, besides infusing more equity capital into the firm, the company said in a statement.

The transaction will take up Agarwal’s stake in Oyo from nearly 10% to 30%, with this the cobrempany’s valuation now will stand at $10 billion. Sequoia Capital and Lightspeed Venture Partners will take home returns of over $500 million each from the partial stake sale.

“It is really a very exciting time for Oyo right now as we make great living spaces come alive across all corners of the world from Texas to Tokyo," said Agarwal in a statement. Recently, the news spread over Oyo Hotels acquisition of Innov8, a co-working spaces provider, highlighting the company’s increasing focus on the fast-growing segment.

Oyo Hotels and Homes has seen a 4.4x year-on-year revenue growth in June, with 1 million rooms under management across hotels and homes. It has over 200,000 rooms in India and Oyo has emerged as the world’s third largest hotel chain in terms of room count, with US and Europe emerging as its strong growth drivers. It claims to have a balance sheet of about $1.5 billion.

The buyback is a part of a larger fundraising plan, including for a public offering. The buyback is thus a part of the plan to have SoftBank, as SoftBank is Oyo’s single largest shareholder with an over 45% stake.