The Oyo top gun who stands to make ₹1,000 crore in IPO

Oyo is expected to create a total wealth of about $668 million (about ₹5,000 crore) for its employees based on a post-IPO valuation of $10 billion, according to a VCCircle analysis. The assumed valuation is based on a slight premium to the $9.6 billion Oyo was valued at in the pre-IPO round.

Abhinav Sinha, global chief operating officer and chief product officer, holds stock options worth ₹1,100 crore, the most among the company’s top executives, the analysis showed.

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Oyo has an employee strength of 5,130, with more than 70% of them in India. About 4,100 employees hold stock options, a person familiar with the matter said on condition of anonymity.

The company boasts an employee stock option pool of close to 470 million shares upon exercise of 11,739 employee stock options (Esops) that were in force as of 30 September 2021. These shares would represent about 7% of the post-issue outstanding shares.

The company also expanded its Esop pool by more than 40% in September, the same month digital payments firm Paytm announced it received shareholders’ nod to more than double its Esop pool.

The top six managerial personnel stand to create additional wealth of more than $200 million for themselves through the vested options.

Sinha, who holds the major chunk 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 holds 309 Esops worth more than ₹130 crore. He is a chartered accountant and joined the company in 2015 after working with General Electric International Inc., GE India Industrial Pvt. Ltd and Philips India Ltd. Maninder Gulati, chief strategy officer, although not listed among the key managerial personnel in the draft prospectus, holds stock options worth more than ₹100 crore.

Other executives who are expected to become ‘crorepatis’ are Rakesh Kumar Prusti (general counsel), Ankit Mathuria (chief technology officer), Dinesh Ramamurthi (chief human resources officer), and Vimal Chawla (vice-president, legal, company secretary and compliance officer).

Ritesh Agarwal is not eligible to hold Esops since he is also the founder, owning one-third of the company, and does not hold an executive or managerial role in the company.

In recent times, many technology startups have created considerable wealth for employees. For instance, Freshworks’ recent Nasdaq-listing made more than 500 employees crorepatis. Likewise, PolicyBazaar founders Yashish Dahiya and Alok Bansal hold Esops worth ₹3,500 crore, and CarTrade’s executives are sitting on Esops worth close to ₹200 crore.

Oyo filed its draft papers on Friday for an initial public offering worth ₹8,430 crore. The IPO will comprise a primary share sale worth ₹7,000 crore. The company will use ₹2,441 crore of the net proceeds to repay the debt owed by its subsidiaries.

In a pre-IPO round, Microsoft invested in the company at a valuation of about $9.6 billion. Oyo had earlier got more than $73 million in strategic investment from San Francisco-based Airbnb, an online marketplace for lodging. SoftBank holds a 46.62% stake and is expected to hold more than 44% after selling some shares in the IPO and post-issue dilution.

Agarwal owns 8.21% in his personal capacity and about a fourth of the company separately through RA Hospitality Holdings Cayman. Other key financial backers of the company are Sequoia Capital, Lightspeed Ventures, A1 Holdings, among others. Oyo turned into a unicorn, or a private startup valued at at least $1 billion, in September 2018.