Zostel Withdraws Court Case Over OYO IPO Disclosures

Budget hostel chain Zostel has withdrawn its legal challenge at the Delhi High Court, which sought directions for the Securities and Exchange Board of India (SEBI) to examine disclosures made by hospitality major PRISM (OYO) in its draft IPO papers.

The withdrawal came after the High Court noted that SEBI would consider Zostel's concerns regardless, as the draft IPO documents are still awaiting regulatory approval. Zostel stated that its rights and remedies remain fully reserved.

The core dispute between Zostel and OYO, concerning Zostel's claimed 7% stake in OYO's parent company, remains pending before the Delhi High Court. This dispute originated in 2015 when OYO signed a non-binding term sheet to acquire parts of Zostel's business, a deal that was never completed.

OYO is proceeding with its IPO preparations, aiming to raise ₹6,650 crore (approximately $80 million) to repay debt and fund growth initiatives.