Zostel withdraws plea in Delhi HC seeking SEBI review of OYO IPO disclosures

The Story in Brief

Zostel has withdrawn its petition from the Delhi High Court seeking a direction to SEBI to examine disclosures in OYO's draft IPO papers, particularly regarding Zostel's claimed 7% stake. The court observed that SEBI would consider the concerns anyway as the draft papers are yet to receive regulatory approval. Zostel retains the liberty to approach the court again. The decade-long dispute stems from a 2015 non-binding term sheet to acquire Zostel's hotel network, which the company says never materialised into a final agreement.

In July 2025, Zostel withdrew its Supreme Court challenge against an earlier Delhi HC order that set aside an arbitral tribunal's 2021 ruling that the term sheet had become binding. The tribunal did not direct OYO to transfer shares or pay damages. OYO, now operating as PRISM, filed its updated DRHP in June 2025 for a ₹6,650 crore public issue comprising entirely fresh shares. OYO has consistently maintained that Zostel's applications are frivolous and not maintainable, and expressed confidence in its legal position.