Now Reading: Zostel withdraws Delhi HC plea on claimed 7% OYO stake ahead of IPO
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Zostel withdraws Delhi HC plea on claimed 7% OYO stake ahead of IPO
Zostel withdraws Delhi HC plea on claimed 7% OYO stake ahead of IPO
Zostel has withdrawn its plea from the Delhi High Court that sought to compel SEBI to examine disclosures in OYO's draft IPO papers, particularly regarding Zostel's claimed 7% stake in the hospitality…
The Story in Brief
Zostel has withdrawn its plea from the Delhi High Court that sought to compel SEBI to examine disclosures in OYO's draft IPO papers, particularly regarding Zostel's claimed 7% stake in the hospitality major. The court noted that OYO's draft offer document has not yet been cleared by SEBI and indicated that Zostel's objections should first be considered by the market regulator, granting Zostel the liberty to reapproach the court later.
The move is the latest development in a long-running legal dispute that began in 2015 when OYO signed a non-binding term sheet to acquire parts of Zostel's business, a deal that never materialised. In 2021, an arbitral tribunal held the term sheet had become binding, but the Delhi High Court set aside that award in May 2025, calling it contrary to public policy. Zostel has now withdrawn its Supreme Court challenge and filed a fresh appeal in the Delhi High Court under the Arbitration Act. OYO confidentially filed its IPO papers in December 2024, and its updated DRHP in June 2025 seeks to raise Rs 6,650 crore to repay borrowings and fund growth.
The Indian Opinion
The narrative that Zostel has a legitimate claim to 7% of OYO often ignores the legal reality. The Delhi High Court did not rule on the merits of the case; it merely noted SEBI should consider the objections first. The core dispute remains that OYO says no binding deal was ever signed, and an arbitral award in Zostel's favour was set aside by the High Court as contrary to public policy. The real test will be whether the Supreme Court agrees to hear an appeal or if SEBI's own scrutiny forces OYO to make additional disclosures.
Sources (2): inc42.com, ndtvprofit.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
