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Oravel Stays Pvt. Ltd has filed the paperwork for an 8,430 crore initial public offering that is expected to value the operator of the hospitality unicorn Oyo Hotels and Homes at least at $10 billion.

The initial share sale will see some of its investors, including Japan’s SoftBank Group, sell a part of their stake. The issue will comprise a primary capital raise of around 7,000 crore and stake sales by investors worth 1,430 crore.

SoftBank Group is selling shares worth 1,328.53 crore, while Grab, which invested $100 million in Oyo in 2018, is selling shares worth approximately 51.6 crore. Huazhu Hotels, which invested in 2017, is selling stocks worth about 23.13 crore. The family firm of Sunil Munjal of the Hero Group is also selling shares worth 26.71 crore.

Oyo’s 27-year old founder Ritesh Agarwal will not be selling his shares. In addition, Sequoia Capital and Lightspeed Ventures are also not selling shares in the IPO.

The filing with the capital markets regulator is the latest example of a rush to tap the public markets by Indian unicorn startups, including Paytm, Nykaa, Ixigo, and Policy Bazaar, amid a dizzying stock market rally.

Bankers to the issue include Kotak Mahindra Capital, Citigroup, JP Morgan, ICICI Securities, Nomura, JM Financial and Deutsche Bank. Currently, founder Agarwal holds an 8.21% stake, while an affiliate promoter firm, RA Hospitality Holdings Cayman, holds 24.94%.

In 2019, Agarwal bought back a portion of shares from investors Sequoia Capital and Lightspeed Ventures via RA Hospitality Holdings.

Currently, SoftBank Group owns 46.62%, Grab 1.81%, Huazhu Hotels 0.81%, and the Munjal family 0.04% in the firm.

The proceeds from the issue worth 2,441 crore will be used to retire debt owed by its subsidiaries Oravel Stays Singapore Pte Ltd, Oravel Hotels LLC and Oyo Hospitality Netherlands BV and Oyo Singapore and OHL.

As of July, the firm had total outstanding borrowings of 4,890.56 crore on a consolidated basis.

For the fiscal year 2021, its total income rose to 4,157.39 crore from 1,3413.27 crore in the previous year. Net loss narrowed to 4,102.28 crore from 11,079.79 crore.

Ahead of its filing, Oravel expanded its share capital from 1.17 crore to 901 crore earlier this month.

Meanwhile, Oyo is also fighting a legal battle against Zostel Hospitality Pvt. Ltd, which runs Zo Rooms.

Zostel has approached the Delhi high court to prevent Oyo from changing its capital structure, including through an IPO.

Earlier, Zostel won an arbitration order that required Oyo to cede 7% equity in the company.

The company has also added Olympian Deepa Malik to its board as an independent director.

Other board members include Agarwal; Lightspeed Venture Partners founder Bejul Somaiya; former Oyo chief executive in India and South Asia Aditya Ghosh; former chief operating officer of Starbucks Troy Matthew Alstead, and William Steve Albrecht, who is the former chief executive of American Accounting Association, according to its draft IPO papers.

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