OYO Files DRHP with SEBI for

 OYO Files DRHP with SEBI for IPO

 ●        OYO files DRHP to raise INR 8430 cr (~$1.2 bn^^)

●        OYO’s IPO consists 83% fresh issue (INR 7000 cr) and 17% offer for sale (INR 1430 cr)

●        OYO has improved its adjusted gross margin from 10% in FY20 to 33% in FY21

●        With over 70% of employees based in India, OYO is building products in India for the world

Global travel technology company, OYO (Oravel Stays Limited) has filed its draft red herring prospectus (DRHP) for its initial public offering (IPO) of INR 8,430 cr ($1.2bn) with the Securities and Exchange Board of India (SEBI).

Founded in 2012, OYO is a leading new-age technology platform empowering the large yet highly fragmented global hospitality ecosystem. It has been focused on reshaping the short-stay accommodation space since its incorporation and has developed a unique two-sided technology platform focused on comprehensively addressing key pain points of Patrons (being the owners, lessors and/or operators of storefronts listed on our platform) on the supply side with our flagship products like Co OYO and OYO OS, and to Customers (being travellers and guests who book storefronts on the Company’s platform) on the demand side. OYO has more than 157,000** storefronts across more than 35 countries that benefit from its platform. On the consumer side, the OYO App has been rated as the most downloaded accommodation app in Asia and third largest in the world in 2020 as per Sensor Tower.

While OYO has a global footprint, its Core Growth Markets comprise India, Indonesia, Malaysia and Europe. These are the most mature markets in terms of scale and unit economics. OYO’s share** of the total addressable market in its Core Growth Markets is less than 1%*creating significant opportunities for it to grow its footprint. As of December 2019, the company’s Total Addressable Market opportunity consisted of 54 million* short-stay storefronts. Around 88%* global hotel storefronts are in the unorganized sector, thus creating significant opportunities for OYO. The scale of OYO’s business drives a self-reinforcing flywheel underpinned by strong local network effects and operating leverage. The virtuous cycle created by this flywheel effect enhances OYO’s platform stickiness and unit economics for both OYO and its patrons with an ever-increasing scale.

 OYO’s initial public offering consists of equity shares of face value of Re. 1 each of Oravel Stays Limited aggregated up to Rs. 8,430 cr (~$1,163 million) (the “Offer”). The offer comprises a fresh issuance up to Rs. 7,000 cr (~$966 million) (the “Fresh Issue”) and an offer for sale aggregating up to Rs. 1,430 cr (~$197 million). The IPO will consist of 83% fresh issue and 17% offer for sale. The Company and its stakeholders may, in consultation with Lead Managers, consider a further issue of equity shares for cash consideration aggregating up to Rs.1,400 million (~$193 million) (the “Pre-IPO placement”). The Pre-IPO placement, if undertaken, will be at a price to be decided by the company and its stakeholders in consultation with the Lead Managers and the Pre-IPO placement will be undertaken prior to filing of the Red Herring Prospectus with the ROC.

Over the past year, the Company implemented a number of measures as a part of its COVID-19 response strategy, including accelerated development and adoption of technology and products to reduce operating costs, and repositioning its offerings. The Company also streamlined strategic and shared services functions, such as revenue management, supply, human resources, legal and finance, from country teams to regional teams to streamline processes, create more efficiencies and reduce costs. As a result of various initiatives that the Company took, its Adjusted Gross Profit Margin improved from 9.7% in Fiscal 2020 to 33.2% in Fiscal 2021 along with ~79% reduction in EBITDA losses from FY20 to FY21 despite the pandemic.

The company has an asset light business model and a lean cost structure. As of March 31, 2021, 99.9% of the company’s storefronts did not have contracts with minimum guarantees or fixed payout commitments from the company, with any investments, capital expenditure, storefront employee costs borne largely by Patrons. This enables the company to be capital-efficient and scale its business with minimal marginal costs.

OYO is able to drive the highest share of Direct-to-Consumer (D2C) channel-led demand compared to other leading traditional hotel chains in India and quite high globally**. OYO was the 3rd^ most downloaded travel app globally in 2020. With over 9.2 million subscribers just in India, OYO Wizard, is the largest loyalty program among online hotel or food brands in India.

OYO is able to ensure higher repeat rates of around 68%, in comparison to various other travel D2C players in India as well as globally*. This is driven by OYO’s wide choice of storefronts, affordability, strength in D2C channel offering and the trust it has been able to generate in the customers’ mind over time, amongst other factors. This also fuels OYO’s revenue generating capability for its patrons.

OYO aims to increase its Patrons’ revenue generation potential by providing them with access to a large Customer base through its D2C direct channels, coupled with its suite of innovative products. In India, Indonesia and Malaysia, as per Redseer study, OYO storefronts that joined the platform in 2018 and 2019, performed better* than independent hotels of similar sizes in 2019 on average. After 12 weeks of joining the OYO platform, OYO hotel storefronts generated 1.5 to 1.9* times more revenue on average compared with the average revenue estimated at an independent hotel of a similar size. In Europe, OYO home storefronts earned an average of 2.4* times more revenue compared with the average revenue estimated at an independently managed home in 2019.

With over 70% of OYOpreneurs and most of the core engineering team based out of India, OYO is building its best in class technologies and products from India for the world.

OYO has proposed/plans to use the net proceeds from the Fresh Issue towards funding the following objects: (i) Prepayment or repayment, in part, of certain borrowings availed by certain Subsidiaries; (ii) Funding organic and inorganic growth initiatives; and (iii) General corporate purposes.

Investors including Ritesh Agarwal, Lightspeed Venture Partners, Sequoia Capital, Star Virtue Investment Limited (Didi), Greenoaks Capital, AirBnB, HT Media and Microsoft are not diluting their shareholding. The offer for sale comprises of aggregate shares from a small part of SVF India (Softbank), A1 Holdings Inc. (Grab), China Lodging, and Global IVY Ventures LLP.

The Global Co-ordinators and Book Running Lead Managers to the offer are Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited and Citigroup Global Markets India Private Limited. The Book Running Lead Managers to the offer are ICICI Securities Limited, Nomura Financial Advisory and Securities (India) Private Limited, JM Financial Limited and Deutsche Equities India Private Limited.

CX partners backed Veeda Clinical Research receives

                     CX partners backed Veeda Clinical Research receives growth capital from Sabre Partners and a group of marquee HNIs

Veeda Clinical Research (“Veeda”), a full-service clinical research organisation (CRO) in India, raised USD 16mn in a round led by private equity fund, Sabre Partners. This round also saw participation from distinguished HNIs such as PranabMody (of JB Chemicals), Havells India family office, Nikhil Vora (Founder of Sixth Sense Ventures ; amongst the first investors in companies such as Paytm, Fogg deodorant, etc.), Arjun Bhartia (of Jubilant), amongst others.

Mr Rajiv Maliwal, Founder and Managing Partner, Sabre Partners, said: “We are excited to partner with Veeda as an equity investor. The CRO industry is witnessing rapid growth resulting from a confluence of economic and regulatory tailwinds. We believe Veeda is well positioned to capitalise this opportunity as one of the largest independent full service clinical research organizations, by revenue in India, as of March 31, 2021. They have offered broad range of services with experienced scientific talent and management team, and we look forward to working with them.”

Mr. Ajay Tandon, Managing Director, Veeda said, “We are delighted that Sabre Partners and the other distinguished investors have chosen to partner with us in realising our vision of being the preferred research partner offering broad range of drug development, pre-clinical and clinical research services to our global innovator, generic and biopharma clients. We will continue to invest in developing our delivery capabilities, to be increasingly relevant to our clients objectives.”

“Veeda Clinical Research Private Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, an initial public offering of its equity shares in the near future and is in the process of filing a draft red herring prospectus with the Securities and Exchange Board of India.”

NSE, Warburg Pincus backed CAMS, files for

NSE, Warburg Pincus backed CAMS, files for IPO

Computer Age Management Services (CAMS), India’s largest technology driven financial infrastructure and services provider to the growing mutual fund industry, serving an AAUM of Rs. 18.7 trillion as on November, 2019 which is 69.4% of total mutual fund assets held by 16 Mutual Funds, on Thursday filed its Draft Red Herring Prospectus (DRHP) with markets regulator Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO).

 

The IPO will be an Offer for Sale (OFS), in which 1,21,64,400 equity shares of face value Rs. 10 each will be offloaded by the Great Terrain Investment Ltd (an affiliate of Warburg Pincus), NSE Investments Ltd , Acsys Investments Ltd, HDFC Ltd and HDB Employees Welfare Trust  The issue includes an eligible employee reservations of upto 1.5% of the post offer paid up equity share capital. The Net Offer will have a 50% allocation to Qualified Institutional Buyers, 15% to Non Institutional Investors and 35% to Retail Individual Buyers.

The Book Running Lead Managers (BRLMs) to the offer are Kotak Mahindra Capital Company Limited, HDFC Bank Limited, ICICI Securities Limited and Nomura Financial Advisory and Securities (India) Private Limited.

Market sources estimate the IPO size to be anywhere between Rs. 1500-1600 crore

Spearheading the financial services segment since over 2 decades and augmenting fund growth, CAMS, offers an integrated canvas of services across physical and electronic touch points for receipt, verification and processing of financial and non-financial transactions for the BFSI sector, largely to the MF industry, in services of transaction origination and execution, payment, settlement and reconciliation; dividend processing, record keeping, report generation, intermediary empanelment and brokerage computation and compliance related services via its proprietary technology platforms and application suites such as myCAMS (2.9mn users), GoCORP (2400+ users), CAMSsmart, digiSIP, digiINFO,edge360 which caters to investors and intermediaries               

The AUM of equity mutual funds serviced by CAMS grew from Rs. 2,180 billion as of March 31, 2015 to Rs. 6,643 billion as of March 31, 2019, at a CAGR of 32.1%, and as of September 30, 2019 was Rs. 6,701 billion.

According to the DRHP, its total income and profit after tax for FY19 stood at Rs. 7,114.96 mn and Rs. 1308.95 mn respectively, its revenues have grown at a CAGR of 19% since 2017.

CAMS, the largest registrar and transfer agent for MFs going forward seeks to maintain its leadership position by deepening its technology integration and improving its value delivery, in addition to its focus on growing its business across insurance, electronic payment collection, Alternative Investment Funds, KYC Registration and Software Solutions.

According to the CRISIL Report, AAUM of the mutual fund industry has grown at a CAGR of 16.2 % between 2010 and 2019. This growth was led by increase in share of mutual funds in household savings as well as the increase in number of individual and institutional investors investing in mutual funds. Indian MF industry has a lot of headroom to grow keeping in mind higher disposable incomes and investable surplus, a growing investor base, increasing financial savings and Govt fillps towards awareness, ease, digitization and perception of MFs as a long term wealth creator