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Oyo raises $50 Mn from InCred at $2.38 Bn valuation

EntrackrEntrackr · 1y ago
Oyo raises $50 Mn from InCred at $2.38 Bn valuation
Medial

Oyo has raised Rs 416.85 crore (approximately $50 million) from InCred Wealth and Investment. The funding is coming after a gap of almost three years for the Gurugram-based hospitality unicorn. The board at Oyo has passed a special resolution to issue 14,37,41,379 Series G CCPS at an issue price of Rs 29 each to raise Rs 416.85 crore or $50 million, its regulatory filing accessed from the Registrar of Companies (RoC) shows. Oyo will use these proceeds for growth, global expansion (including acquisitions), and enhanced business plans, according to the filings. As per TheKredible estimates, the company has been valued at around Rs 19,756 crore or $2.38 billion post-allotment. Importantly, the new investor will command a 2.11% stake in the company (post allotment). In August 2021, US-based tech giant Microsoft had invested $5 million in the Lightspeed-backed firm at a valuation of $9.6 billion. The latest capital has come at a valuation haircut of more than 70% from its peak. Recently, Oyo’s founder Ritesh Aggarwal said that the firm posted its maiden annual net profit of Rs 100 crore in FY24. The company didn’t disclose its revenue for the last fiscal. In FY23, its revenue from operations grew 14.3% to Rs 5,464 crore from Rs 4,871 crore in FY22. During the period, the firm cut down losses by 33.7% to Rs 1,287 crore. Recently, Oyo withdrew its draft papers (DRHP) for the second time in the wake of unfavorable conditions. The firm may refile the IPO papers after the conclusion of the ongoing round in which Oyo is likely to raise more capital. Oyo’s major investor SoftBank first reduced its valuation to $3.4 billion in 2022. However, the firm rejected the markdown then.

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Oyo raises $65 Mn from Ritesh Agarwal’s Redsprig Innovation

EntrackrEntrackr · 6m ago
Oyo raises $65 Mn from Ritesh Agarwal’s Redsprig Innovation
Medial

Oyo raises $65 Mn from Ritesh Agarwal’s Redsprig Innovation Hospitality major Oyo has raised Rs 550 crore (approximately $65 million) from Redsprig Innovation Partners, an affiliate entity of the company’s founder Ritesh Agarwal. The board at Oyo has passed a special resolution to issue 12,91,07,982 equity shares at an issue price of Rs 42.6 each to raise Rs 550 crore or $65 million, its regulatory filing accessed from the Registrar of Companies shows. After the recent funding injection, the company's valuation rose to $3.79 billion, reflecting a 59.2% increase from Oyo's previous Series G round, when the firm was valued at $2.38 billion. As per the filings, the company plans to use these funds for growth, supporting global expansion (including acquisitions), strengthening business strategies, and other corporate initiatives. The funding will also result in a 1.728% dilution of the company's total stake. This is the second major capital infusion by Agarwal in Oyo. In August 2024, he led a $175 million round through his Singapore-based fund, Patient Capital. Last month, a CNBC TV18 report suggested that Nuvama Wealth & Investment Limited (formerly Edelweiss Securities) purchased shares worth Rs 100 crore in Oyo’s parent Oravel Stays Limited. During FY24, IPO-bound Oyo posted a flat scale which stood at Rs 5,389 crore, as compared to Rs 5,464 crore in FY23. Despite the stagnant revenue, the company managed to control its expenditure by 16% which resulted in Oyo posting a net profit after tax (PAT) of Rs 230 crore in the last fiscal (FY24). In May, the Gurugram-based company withdrew its draft papers (DRHP) for the second time due to unfavorable conditions. The firm also said that it will refile the IPO papers after concluding a large funding round, which is about to close after the latest fundraises.

How profitable InCred stands out among bleeding fintech lenders: Interview with Bhupinder Singh

EntrackrEntrackr · 11m ago
How profitable InCred stands out among bleeding fintech lenders: Interview with Bhupinder Singh
Medial

Lending has turned out to be the most obvious money making channel for fintech startups in India. Right from large to small fintech companies are resorting to distributing loans through own and third party lenders such as banks and NBFCs. Most growth stage fintech startups have been lending aggressively, but they still bear huge losses on a consolidated basis. However, the eight-year-old InCred is an exception as the firm’s operating revenue spiked 48% to Rs 1,267 crore in FY24. At the same time, its profit grew 160% to Rs 316 crore in FY24. InCred claims to have offered credit to 3,50,000 borrowers since its inception in 2016. InCred group operates three companies – InCred Finance, InCred Capital, and InCred Money. To understand InCred’s growth across segments, startup investments including Oyo and collection (recovery) among others, Entrackr spoke to the company’s founder and chief executive Bhupinder Singh. Here are the edited excerpts. How has the size of asset under management (AUM) across personal, education and business loans grown? Our asset under management or AUM grew 49% in FY24 and we closed FY24 with over Rs 9,000 crore in AUM, spread across personal loans which accounts for 44% of our AUM while micro, small and medium enterprises (MSMEs) contributed 35% of the total disbursal. Educational loans formed 21% of the entire loan book including third-parties capital. Can you talk about growth numbers across three segments: personal, business and educational in the last fiscal year? We have had strong growth across all three segments in FY24: Personal loans grew at 57% whereas educational loans spiked at 86%. Business (MSMEs) borrowing increased 32% during the last fiscal. Which factors led to the upsurge in educational loans? Strong preference to study abroad for superior exposure and growth prospects, along with growing awareness in terms of universities and courses through social media and internet are some of the key driving factors, which have accentuated further over the last few years. InCred has started equity investment across startups. Why has it entered into what’s widely dubbed as risky equity investment? We invest in startups through InCred Capital where we focus on identifying attractive investment opportunities in private companies. However, we only put money in startups which are available at reasonable valuations and have long-term structural growth potential. Besides InCred Capital, we also have a private equity fund providing growth capital to startups and other businesses. You said that InCred Capital looks for reasonable valuation while investing into startups. InCred capital recently invested in Oyo at a $2.38 Bn valuation. Do you think this is the right valuation of Oyo? Any investment opportunity we identify for our clients is based on our fundamental thesis of providing an attractive risk-return profile for our wealth clients. We believe that Oyo falls in that category and provides an opportunity for long term value creation. Collection is the hardest part of any form of lending be it traditional or digital. How did InCred solve this and what’s the size of NPA? Agreed. I think it starts right from our strong, proactive focus on risk and analytics, and then collections, which is more reactive. We have over 150 pan-India collections teams across products that track repayments and employ multiple modes, depending upon the product-specific requirement and level of customer delinquency. For early defaulters, we use techniques like tele-calling to educate them about default implications such as credit score deterioration. For late-stage defaulters, focus is more on limiting losses through field visits, vendor engagement among others. We also use mechanisms like setting up escrow accounts for superior collections. InCred efficiency has been consistently tracking at 98%. Our March 2024 NNPA stood at 0.8% and was among the best in the industry. InCred merged with KKR Financial services in 2022. How has the merger panned out in terms of business? Let me start by giving you some context. While technically it was a reverse merger of InCred with KKR India’s credit arm, substance over form, InCred acquired KKR’s corporate loan book. It was a win-win for both InCred and KKR. What KKR got was a profitable exit from its corporate book, which they were looking for, and the opportunity to be part of a successful and long-term lending growth story with InCred in the driver’s seat. For InCred, the deal was purely an equity raising exercise with KKR joining our cap table and our net worth swelling 3X to over Rs 3,200 crore as of December 2023. At the same time, we were able to quickly wind down the corporate loan book and focus on building a granular retail franchise, which is our broad vision for InCred Finance.

Exclusive: InCred Capital to raise $50 Mn led by family offices

EntrackrEntrackr · 9m ago
Exclusive: InCred Capital to raise $50 Mn led by family offices
Medial

InCred Capital, the wealth and institutional arm of the InCred Group, is in advanced discussions to raise $50 million, according to two sources familiar with the details of the deal. “The new funding round is driven by the company’s strong performance in the first half of FY25, with an average revenue run rate of Rs 800 crore and a profit before tax of around Rs 200 crore,” said one of the sources, who requested anonymity as talks are private. As a full-stack financial services platform, InCred Capital integrates wealth management, asset management, M&A, capital markets, equity research and broking, as well as equity derivatives. InCred Capital’s investment banking division has been in the news recently for several notable transactions, including capital raises for Oyo, E2E, Ugro, and Indiabulls. The platform has amassed over $5 billion in AUM, spanning family offices, high net worth individuals, corporate treasuries, and institutional clients. Lead investors in InCred Capital’s new round include Ranjan Pai, through the Manipal family office, the Motherson Sumi family office, MMG family office, as well as the founder Bhupinder Singh himself, according to another source who also spoke on the condition of anonymity. “The company’s valuation is expected to range between $550 million and $600 million,” said the above-mentioned source. Entrackr’s queries to InCred on Friday remained unanswered at the time of publication, while inquiries to the aforementioned investor did not receive immediate responses. InCred Group’s lending arm, InCred Finance, was one of two companies to achieve unicorn status in 2023, raising $60 million in a Series D round led by Ranjan Pai of MEMG and others. Entrackr had exclusively reported on the firm’s unicorn round, which valued the company at $1.03 billion. In FY24, InCred Finance’s assets under management (AUM) saw a 49% increase, exceeding Rs 9,000 crore across personal, MSME, and educational loans, with overseas education loans experiencing rapid growth. In an interview with Entrackr, InCred Group founder and CEO Bhupinder Singh highlighted the strong demand for studying abroad, fueled by better exposure and overall growth prospects. In 2022, InCred Finance completed a reverse merger with KKR India’s credit arm, acquiring KKR’s corporate loan book. However, the corporate loan book was wound down shortly after, allowing InCred to shift its focus to building a tech-enabled retail and MSME franchise.

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