OYO’s ESOP pool is worth roughly $ 1 billion to cover 80% of employees

According to the DRHP, OYO has an ESOP pool of 63.8 Cr options with a conversion value of $ 1 billion

About 531 employees have already received 11 million shares worth 124 Cr INR upon ESOP conversion

The startup’s offer includes the issuance of new shares worth INR Cr 7,000 and a sale offer amounting to INR Cr 1,430.

IPO-linked Oravel Stays, which operates hospitality giant OYO, will cover more than 80% (~ 1,200 employees) of its staff under its ESOP program, according to Inc42 sources.

According to the Inc42 calculation and OYO’s previous regulatory filings, OYO has a total ESOP pool of 638,240,000 options, which will be worth nearly $ 1 billion upon conversion.

The start-up had allotted each share in capital at $ 58,490 to Microsoft when it raised $ 5 million in its pre-IPO cycle, and then split its shares at the ratio of 1:10.

The startup had awarded 3,999 free shares for each share held, and for preferred shareholders, OYO changed the equity conversion ratio from 1: 1 to 1: 4,000, according to regulatory documents. Thus reducing the share price to $ 1.46 or INR 109.

So, if all employees choose to convert their ESOP to equity stock at this time, the value of the equity stock will be 638,240,000 * INR 109 = INR 6,956 Cr ($ 931 million)

The OYO led by Ritesh Aggarwal, which targets a public listing of INR 8,430 Cr and awaits the approval of the market regulator SEBI, allocated 1,145,6,030 shares worth INR 124 Cr upon ESOP conversion to 531 of its existing employees, according to the hospitality giant. deposit with the MCA.

Founded in 2013 by Ritesh Agarwal, OYO last raised $ 5 million from US tech giant Microsoft for a valuation of $ 9 billion. Earlier in July, the startup closed $ 660 million in term loan financing from global institutional investors. At the time, the startup had awarded 80 preferred shares and 5 shares to US tech giant Microsoft.

According to the DRHP, OYO’s total income fell almost 70% in FY21 to INR 4,157.38 Cr. Its total turnover amounted to INR 13,413.26 Cr during the previous financial year. The drop in income was largely due to the multiple lockdowns caused by the pandemic in India and all other markets.

The company recorded a 70% contraction of losses to 3,943.8 Cr INR in FY21 compared to the loss of 13,122.77 Cr INR in FY20, due to a huge drop in spending. His total expenditure in FY21 was INR 6,936.07 Cr compared to INR 22,800.12 in FY20. His benefit expense fell by 63% to INR 1,742.12 during financial year 21, against 4 765.28 Cr INR during financial year 20 due to several layoffs.

Currently, OYO has 5,130 employees worldwide, including more than 3,600 in India. OYO had nearly 10,000 employees at the start of 2020, according to reports.

At present, SoftBank of Masayoshi Son owns 46.62% of the company, while RA Holdings of OYO holds 24.94% of the shares of the company. Founder Ritesh Aggarwal owns 8.21% of the capital of the hospitality unicorn, while Lightspeed, Sequoia and Airbnb hold 2.74%, 3.24% and 1.36% respectively.

OYO and ixigo, operated by Le Travenues Technology, are the two Indian startups headed for a national IPO. ixigo, which offers travel tickets online, has filed its draft red herring prospectus (DRHP) to raise INR 1,600 Cr through an initial public offering. The company had filed its DRHP in August this year, but has yet to receive approval from SEBI.

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