The Board of Oravel Stays Private Limited, operator of the travel technology platform OYO has approved the increase in the authorised share capital of the company from Rs 1.17 crore to Rs 901 crore, according to a regulatory filing.
The development comes ahead of its much-anticipated IPO, for which DRHP is likely to be filed in the next few months.
Sources said that the move is a precursor to the initial public offering (IPO).
According to people in the know, OYO has initiated discussion with investment banks including JP Morgan, Citi and Kotak Mahindra Capital to manage its public issue slated to raise between $1.2-1.5 billion at a valuation range of $14 billion-16 billion.
Authorised capital is the maximum amount of capital that a company is authorised to issue at any point of time. Such limit is decided by the shareholders and is prescribed in the Memorandum of Association, constituent document of the company.
A company increases its authorized capital when it anticipates any further capital requirement or intends to go public and list its shares on the stock exchanges.
According to the copy of the filing, OYO's board approved a resolution to increase its authorized share capital.
Earlier in July, it became the first Indian startup to raise $660 million through the term B loan (TLB) route from global institutional investors, including Fidelity Investments to refinance and simplify its existing borrowings.
The company also became the first Indian startup to be rated by international ratings agency Moody's and Fitch.
Tech-based companies like OYO are expected to play a key role in Indian stock markets with the strong pipeline of firms filing for IPOs. In the coming years, it is going to become a significant part of the Indian stock markets which can be anticipated post the bumper listing of Zomato.
OYO has earlier raised funding rounds from marquee global venture capital funds like Softbank, Sequoia, Lightspeed Venture Partners, Hero Corporate and leading global consumer tech companies like DiDi, Grab and Airbnb.
Its business involves more than 1.58 lakh hotels and homes and has store-front presence in more than 35 countries, while employing more than 70 per cent of its workforce in India.