On September 6, 2019, CCI approved the additional acquisition of 0.83% shareholding in Oravel Stays Private Limited (‘OYO’) by SVF India Holdings (Cayman) Limited (‘SVF’). In addition to this transaction, RA Hospitality Holdings (Cayman) (‘RA Co’) would acquire equity shares in OYO. ^[1]

Prior to the combination, SVF had the ability to appoint two out of nine directors on OYO’s board. Post the combination, since the board is expanding SVF will be entitled to appoint one more director i.e. three out of eleven directors on the board of OYO.

Other investors were also acquiring a minority shareholding in OYO, but the exact details were unavailable due to confidentiality.

RA Co is company incorporated in the Cayman Islands and does not have any commercial operations in India. 100% of RA Co is indirectly owned by Mr. Ritesh Agarwal, the founder and promoter of OYO. Mr. Ritesh Agarwal currently owns 12.28% equity in OYO.

SVF is an entity incorporated in the Cayman Islands and is a holding company to hold the investments on behalf of Softbank Vision Fund L.P. It is also a part of the Softbank Group (‘SBG’). SVF itself does not have any physical presence in India and is not engaged in the provision of services. However, certain direct/ indirect subsidiaries of SBG and portfolio companies, in which SBG has non-controlling investments (with certain veto rights) are present in India.

OYO is a technology start-up incorporated in India and is primarily active in the hospitality and hotels business in India.

RA Co does not have any operations in India. Additionally, Mr. Ritesh Agarwal does not have any other investments in the hotel and hospitality space, apart from OYO.

CCI didn’t identify any horizontal or vertical overlaps in the business activities of the other investors with OYO. CCI held that since SVF already has a shareholding of 49.16% in OYO and will increase it by 0.83% to 49.99% by virtue of the combination, the proposed change in shareholding is unlikely to affect the competition dynamics in any of the segments in which OYO is present.

In view of this, CCI approved the combination.

[1] Combination Registration No. C-2019/07/672