Japanese financial services Nomura and Mizuho will be part of the three member consortium team that will finance Ritesh Agarwal’s buyback proceedings in Oyo Hotels and Homes. The third member of this consortium is also a Japanese financial company but its identity is still not known.
As is already known, the Japanese consortium will provide a total debt of $2 Bn that will help Agarwal to buyback shares worth $1.5 Bn from existing investors Sequoia Capital and Lightspeed Venture. The rest $500 Mn will be invested as equity capital in the company.
According to sources, this financial loan is only for the period of three years and Oyo will be repaying these loans through IPO proceedings that is expected to hit the market in couple of years.
Meanwhile, Agarwal’s buyback proceedings have become a talking point in India’s startup industry and there is a good reason for this buzz. Agarwal’s buyback proceedings are actually the largest buyback undertaken by an Indian founder till date.
Nomura all set to take equity bet on Oyo
The bigger news is that Nomura is all geared up to invest $50 Mn in Oyo via sale of secondary shares from SoftBank, according to media reports. This will mark Nomura’s first ever equity investment in an Indian startup.
People privy to the matter claimed that the Japanese financial giant is seriously looking to take bold bets on high potential companies from emerging markets like Asia Pacific and other regions.
An investment from Nomura may also pave way for strategic partnership that may help Oyo in consolidating its position in the Japanese market. Oyo launched it services in Japan earlier this year in collaboration with SoftBank in a bid to tap the hospitality boom ahead of the Tokyo Olympic Games 2020.