Oyo’s top gun expected to earn 1,000 crores in IPO

NEW DELHI : Thousands of Oravel Stays Pvt. Ltd, the operator of the Oyo hotel aggregation platform, is expected to do a bargain as the company proceeds with its scheduled IPO.

Oyo is expected to create total wealth of around $ 668 million (approx. ??5,000 crore) for its employees based on a post-IPO valuation of $ 10 billion, according to an analysis by VCCircle. The supposed valuation is based on a slight premium over the $ 9.6 billion Oyo was valued at in the pre-IPO cycle.

Global COO and Chief Product Officer Abhinav Sinha holds stock options valued at ??1,100 crore, the most among the company’s senior executives, showed the analysis.

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Oyo has 5,130 employees, over 70% of whom are in India. About 4,100 employees hold stock options, a person familiar with the matter said on condition of anonymity.

The company has a stock option pool for employees of nearly 470 million shares following the exercise of 11,739 employee stock options (Esops) which were effective as of September 30, 2021. These shares would represent approximately 7% of the shares outstanding post-issue.

The company also expanded its Esop pool by more than 40% in September, the same month digital payments company Paytm announced it had received shareholder approval to more than double its Esop pool.

The six senior executives are expected to create additional wealth of more than $ 200 million from the vested options.

Sinha, who owns most of these options, is an alumnus of IIT-Kharagpur and Harvard University. He joined Oravel in 2014 after stints at ITC Ltd and Boston Consulting Group.

Chief Financial Officer Abhishek Gupta owns 309 Esops worth more than ??130 crores. He is a Chartered Accountant and joined the company in 2015 after working for General Electric International Inc., GE India Industrial Pvt. Ltd and Philips India Ltd. Strategy Director Maninder Gulati, although not among the key executives in the draft prospectus, holds stock options worth more than ??100 crores.

Other executives who are expected to become “crorepatis” are Rakesh Kumar Prusti (General Counsel), Ankit Mathuria (CTO), Dinesh Ramamurthi (Director of Human Resources) and Vimal Chawla (Vice President, Legal, Company Secretary and officer compliance).

Ritesh Agarwal is not eligible to own Esops as he is also the founder, owns a third of the company and does not hold a managerial or managerial position in the company.

In recent times, many tech startups have created tremendous wealth for employees. For example, the recent Nasdaq listing of Freshworks has crorepatis over 500 employees. Likewise, the founders of PolicyBazaar, Yashish Dahiya and Alok Bansal, hold the value of Esops. ??3,500 crore, and CarTrade executives are sitting on Esops worth nearly ??200 crores.

Oyo on Friday filed his draft papers for an initial public offering of a value ??8,430 crores. The IPO will include a first sale of shares worth ??7,000 crores. The company will use ??2441 crore of net proceeds to repay debt owed by its subsidiaries.

During a pre-IPO cycle, Microsoft invested in the company at a valuation of around $ 9.6 billion. Oyo had previously secured more than $ 73 million in strategic investment from Airbnb, a San Francisco-based online hosting marketplace. SoftBank has a 46.62% stake and is expected to hold more than 44% after the sale of certain shares in the IPO and post-issue dilution.

Agarwal owns 8.21% personally and about a quarter of the company separately through RA Hospitality Holdings Cayman. The company’s other main backers are Sequoia Capital, Lightspeed Ventures, A1 Holdings, among others. Oyo morphed into a unicorn, or private startup valued at at least $ 1 billion, in September 2018.

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