Policy · Mobility & Logistics

Zostel urges SEBI to review Oyo IPO disclosures

What they do

Zostel approached SEBI on 7 July 2026, alleging Oyo's IPO disclosures give an incomplete account of their legal dispute

Zostel claims it is owed ~7% equity in Oyo from a failed 2015 acquisition, which could affect Oyo's capital structure

Zostel asked SEBI to check if disclosures meet SEBI Act and ICDR Regulations standards before IPO proceeds

Zostel approached SEBI on 7 July 2026, urging a review of Oyo's IPO disclosures regarding their legal dispute.
Zostel alleged Oyo's UDRHP (updated draft red herring prospectus) gives an incomplete and selective account of the dispute.
Zostel asked SEBI to check if disclosures meet SEBI Act and ICDR Regulations standards before the IPO proceeds.
Zostel claims the dispute is not an ordinary commercial case; it concerns its claim to ~7% equity in Oyo from a failed acquisition.
Zostel contends the litigation outcome could affect Oyo's capital structure, valuation, and investor risk assessment.
The dispute began in 2015 when Oyo signed a non-binding term sheet to acquire Zostel.
In 2021, an arbitral tribunal ruled in Zostel's favour, but the Delhi High Court later set aside the award, holding the term sheet non-binding.
In July 2025, the Supreme Court refused to entertain Zostel's appeal against the High Court order, but Zostel maintains appellate proceedings are still pending before the Delhi High Court.

Zostel's intervention comes as Oyo filed its UDRHP to raise Rs 6,650 crore through a fresh issue of shares, with no offer-for-sale component.
Zostel argues the dispute is material to Oyo's IPO and should be fully disclosed to protect investors.
The legal battle has been ongoing for over a decade, with multiple court rulings and appeals.
Zostel's request could delay or affect Oyo's IPO timeline if SEBI acts on the concerns.

OYO is a hotel booking platform offering standardised rooms, free Wi-Fi, AC, clean rooms, essential toiletries, and helpful staff.
OYO operates across 35+ countries with 175,000+ hotels and homes.
OYO has hosted 100 million+ guests and has 10 crore+ app downloads.
OYO for Business is trusted by 5,000 corporates.
OYO added 3,500 new corporate clients in FY25, logging 20% annual growth.
OYO became the most profitable Indian startup in FY25 with Rs 623 crore profit.
OYO's premium brand Sunday Hotels crossed 200+ properties worldwide in 2026.
OYO's parent company was renamed to PRISM in September 2025 to reflect global expansion.

Zostel requested SEBI to direct Oyo to make corrective disclosures.
Zostel asked SEBI to consider IPO progress only after disclosure concerns are addressed.
No other stated plans are available from the facts.