Mumbai17 minutes ago
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Hospitality chain Oyo Rooms, invested by Japan’s SoftBank Group, is preparing to file the Draft Red Herring Prospectus (DRHP) again to launch an IPO.
According to news agency PTI, Oyo is soon going to finalize its re-financing plan to raise $450 million through the sale of dollar bonds.
JPMorgan could be the lead banker for the refinancing through the sale of dollar bonds at an estimated annual interest rate of 9% to 10%, the report said.
SEBI to withdraw existing DRHP apply to
Oyo has already filed an application with market regulator Securities Exchange Board of India (SEBI) to withdraw its existing DRHP. The company intends to file an updated DRHP with SEBI after the bond issue.
Ritesh Aggarwal started Oyo in 2013 with an initial investment of ₹82 lakh when he was 19 years old.
What is DRHP?
DRHPs are documents that contain essential information about the company planning an IPO. It is filed with SEBI.
It provides important information about the company’s finances, its promoters, the risks of investing in the company, reasons for raising funds, how the funds will be used, among other things.
Why do companies bring IPO?
- To increase business: Whenever a company decides to launch an IPO, it usually wants to raise capital to expand its business. With this, the company gets the necessary funds to expand its business and it does not have to take loans.
- Help in branding: After listing on the exchange, it helps in branding the company. Due to this people start knowing more about that company.
- Risk sharing: When you buy shares of a company, you also become a stakeholder in the risk like its promoter. The risk depends on how many shares you hold. But the promoter definitely succeeds in distributing his risk among many people.
