Ritesh Agarwal
OYO Rooms founder Ritesh Agarwal

Ritesh Agarwal, CEO of Oyo Hotels and Homes, has set up a firm in the Cayman Islands to steer funding flow to his hospitality chain as well as spearhead the share buyback plan that's in the works. The Cayman-based company, RA Hospitality, will drive investments into the Oyo Hotels even as Agarwal is in talks with Japanese funds for potential investment. 

As per a filing to the Competition Commission of India, RA Hospitality was named as the acquirer while Oravel Stays, the parent company of Oyo, was the target, the Economic Times reported. 

Agarwal has been looking to get a fresh funding of about $1.5 billion from Japanese financial services firm Nomura. The funds would help him buy back shares from Sequoia and Lightspeed Venture Partners and theeby increase his stake in the company he founded in 2013. He has also been in talks with other global investors and NBFCs for the large funding.

Oyo Rooms
Oyo RoomsPhoto credits: Reuters

According to the ET, the successful transaction and the buybacks will help Agarwal raise his stake to 32 percent from about 10 percent currently.

In addition to the $1.5 billion funds, there might be a transaction of about $500 million for the exchange of stake, the report said. .