Reject, Suspend Oyo IPO, Zostel Asks Sebi

Zostel (Zo Rooms) has urged the Securities and Exchange Board of India (Sebi) to reject budget hospitality chain Oyo’s draft red herring prospectus (DRHP) and suspend its proposed initial public offering (IPO). ET has reviewed a copy of the letter.

Zostel has termed Oyo’s move to file for an IPO ‘illegal’. Zostel is Oyo’s erstwhile rival.

ET was the first to report about Zostel’s plan to move the capital markets regulator on October 4. Zostel had firmed up plans to ask the regulator to restrict Oyo’s $1.2-billion IPO, citing its ongoing legal dispute with firm, ET reported.

In the letter written on Monday, Zostel said Oyo’s IPO is “non-maintainable as Oravel’s (Oyo’s parent firm) capital structure is not final”. Therefore, Oravel’s filing of the DRHP under the circumstances is illegal in view of the stipulation contained under Regulation 5(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulation, 2018 (ICDR Regulations), it said.   S-ET

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