Oyo, Gurugram-based, largest hospitality chain in India, is, reportedly, eyeing to set up its property fund and has been into a discussion with several global money managers, cited ET.
According to the close aide sources of the company, the decision to set up a fund will let the Softbank-backed hotel chain company to acquire properties across markets and lease those to the company at an agreed-upon provided. The realty talks are still at an exploratory stage, the source said.
The developments come at a time when the company is on an expansion level. Last week, Oyo announced its entry into the US market.
The SoftBank backed hospitality chain Oyo was started by Ritesh Agarwal in 2013. The startup was started from a single hotel to over 8500 hotels at present. It is the fastest growing network of hotels, offline and online and the current evaluation is over $400 million.
At present, the company operates more than 23,000 properties with more than 850,000 rooms, making it the world’s sixth-largest lodging provider by its own measure.
The company has held conversations with some of the world’s top asset management firms to come on board as a possible co-manager of the fund, added sources.
Albeit, there is no assurance that the company, valued at about $5 billion in its last round of equity financing, will move ahead with the plan of setting up the fund.
The investment, if successfully made, will provide the hotel giant the financial uplift, as it move towards the goal of coming out as the world’s largest hospitality chain .
Evidently, Oyo will raise separate capital for the fund from the global investors if its plan get settled-in and the fund will also look to set up a special purpose vehicles that will house the assets it acquire, said the above mentioned sources.
Earlier, Oyo has announced that it will put $300 million over the next few year in the US market, $600 million in China and and additional $200 million in India, respectively.
While, other hospitality startups, which are emerging at a fast pace in India includes Yatra, Fabhotels, Treebo, MakeMyTrip, ClearTrip, etc.