Oyo, the Gurugram-based hospitality firm, has successfully raised Rs 416.85 crore (about $50 million) from InCred Wealth and Investment, marking its first major fundraising event in almost three years.

Per documents filed with the Registrar of Companies (RoC), Oyo's board has approved the issuance of 14,37,41,379 Series G Compulsorily Convertible Preference Shares (CCPS) at a price of Rs 29 each. This move values the company at around Rs 19,756 crore ($2.38 billion) post-allotment, granting the new investor a 2.11% stake.

The newly acquired funds will be utilized to support Oyo's growth and international expansion, including potential acquisitions and enhanced business strategies, as outlined in the filing.

This investment comes as Oyo's valuation has significantly dropped. Back in August 2021, Microsoft had invested $5 million in Oyo, valuing it at $9.6 billion. The current funding round reflects a substantial valuation reduction of over 70% from its previous peak.

Oyo's founder, Ritesh Aggarwal, recently announced the company’s first-ever annual net profit of Rs 100 crore for FY24. However, revenue details for the last fiscal year were not provided. In FY23, Oyo's operational revenue rose by 14.3% to Rs 5,464 crore from Rs 4,871 crore in FY22, while losses were cut by 33.7% to Rs 1,287 crore.

The company has also withdrawn its draft red herring prospectus (DRHP) twice due to unfavorable market conditions. Oyo may refile for an IPO after the current funding round, which is expected to bring in more capital, concludes.

Previously, SoftBank, a major investor in Oyo, reduced its valuation of the company to $3.4 billion in 2022, a markdown that Oyo did not accept at the time.