Policy · Professional & Local Services

Zostel asks SEBI to review OYO's IPO disclosures

By Startup Enthusiast · 10 July 2026

What they do

Zostel runs backpacker hostels, homes, trips, and community travel experiences

It asked SEBI to check if OYO's IPO filing fully and fairly discloses their legal dispute

Zostel claims it holds a claim on about 7% equity in OYO from a failed 2015 acquisition

Zostel approached SEBI to review OYO's updated draft red herring prospectus (UDRHP) disclosures regarding their legal dispute.
Zostel claims OYO's IPO filing gives a partial and selective overview of the legal conflict.
Zostel requested SEBI to evaluate if disclosures meet completeness, fairness, and materiality under the SEBI Act and ICDR Regulations.
Zostel claims it holds a claim on approximately 7% equity in OYO from the failed acquisition.
The dispute began in 2015 when OYO signed a non-binding term sheet to acquire Zostel.
In 2021, an arbitration tribunal ruled in favour of Zostel.
The Delhi High Court annulled the arbitral award, saying the term sheet was non-binding.
In July 2025, the Supreme Court declined to hear Zostel's appeal against the High Court decision.
Zostel claims appeals are still pending in the Delhi High Court and should be disclosed in IPO documents.
Zostel requested SEBI to order OYO to correct or add disclosures, compel due diligence, and allow the IPO only after disclosure issues are resolved.

OYO's revised DRHP aims to raise ₹6,650 crore via a fresh issue, with no offer for sale (OFS) component.
The Delhi High Court disposed of Zostel's fresh application as 'not pressed' in view of a March 14, 2022 order.
The court directed Zostel's pending appeal (FAO(OS) (COMM) 124/2025) to be heard on August 12, 2026.
Zostel's spokesperson said OYO accepted the binding effect of the March 14, 2022 order and reaffirmed 7% equity transfer if Zostel wins the appeal.
In May 2025, the Delhi High Court set aside the arbitral award in Zostel's favour.

Zostel is a backpacker hostels and social travel brand offering hostels, homes, trips, and community-led travel experiences.
It offers franchise opportunities for Zostel and Zo Stays, partnerships for travel agencies, and creator/artist collaborations.
Zostel offers curated Zo Trips along with stays.