Travel tech unicorn Oyo has received the approval of shareholders to raise Rs 416.85 crore. The company will be raising the shares via preference shares. This is as per a report by the Economic Times.
As per Investopedia, preference shares are shares of a company's equity that pay dividends to shareholders ahead of dividends on common stock. The approval was received at the extraordinary general meeting held on June 18.
Further, as per the approval given by the shareholders, Oyo’s authorized share capital will rise to Rs 1,341.14 crore from Rs 901.14 crore, as per the report. The travel tech unicorn reportedly received the approval of the shareholders to issue 14.37 crore Series G CCPs (compulsory convertible cumulative preference shares) through a private placement to InCred Wealth.
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The value of the preference shares is Rs 29 each, and Rs 416.85 crore will be raised for Oyo. As per the report, the resolution was passed with a 99.99 percent majority in the meeting. Additionally, the approval of the shareholders will increase Oyo's authorized share capital to Rs 1,341.14 crore. This will in turn provide greater flexibility for the company to issue new shares in the future.
Speaking to the Economic Times, a source said, “This EGM marks an important milestone for Oyo as the company's ability to raise funds and restructure its capital base underscores investor confidence in its long-term vision and prospects.”
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This development is coming at a time when there were recent reports that highlighted that Oyo is seeking fresh funding of Rs 1,000 crore from family offices. As per the Economic Times, the backers for the same include promoters of Mankind Pharma Ramesh and Rajeev Juneja, stock market expert Utpal Sheth, and Anand Jain, a senior executive from Reliance Industries. Additionally, last month, Oyo also withdrew its application for an initial public offering (IPO), last month.
