Ritesh Agarwal now enjoys unprecedented control over OYO Hotels and Homes – a company that he founded way back in 2013. The Gurgaon based company has officially undergone major changes in the ownership pattern with Agarwal now owning 30% stake in the company.
The official changes in Oyo’s ownership pattern happened after India’s anti-trust regulator Competition Commission of India (CCI) gave necessary regulatory approval to Agarwal’s ambitious buyback plan. The buyback will allow one of India’s youngest CEOs to buyback worth $1.5 Bn shares from existing investors Lightspeed Venture Partners and Sequoia Capital.
Agarwal has confirmed about the regulatory approval to Economic Times. Simultaneously, Oyo has also got approval to raise additional $500 Mn from its founder and CEO.
It is now already known that Japanese financial giants Nomura and Mizuho will be funding the entire buyback proceedings. The deal also sets a new high for Oyo’s valuation, with its market valuation now reportedly zooming to $10 Bn.
The fresh capital infusion comes at a time when the SoftBank backed company is in midst of strategizing its aggressive expansion plan not only in the domestic but also international markets. Only last month, the company bought Hooters’ property in Les Vegas – marking its first ever acquisition in the highly competitive American market.
The company is simultaneously going full-throttle to consolidate its footprints across China, Southeast Asia and Middle-eastern markets.
Meanwhile, Agarwal’s ambitious buyback marks a rare phenomenon where the founder ends up consolidating his position in his company despite having a high-profile investor like SoftBank on board.
In other high profile cases like Flipkart and Uber, founders have seen their powers eroding after diluting their stakes to external investors.
Therefore, it won’t be wrong to say that Agarwal may have laid a new precedence for all the co-founders who wish to maintain an iron grip over their company.