Oyo eyes over $12 billion valuation in IPO, founder not to offload stake

Oyo eyes over $12 billion valuation in IPO, founder not to offload stake


Bengaluru: Oyo Hotels & Homes aims to list in India at a valuation of $12-15 billion, people aware of the company’s IPO plans said, but founder Ritesh Agarwal is unlikely to offload any shares.

The SoftBank Group-backed hospitality startup was valued at $9 billion
after a “strategic investment” by Microsoft Corp. last month.

Oyo is looking to raise anywhere between $1 billion and $1.2 billion largely by issuing fresh stock in the IPO, the people said. Existing investors would sell some stake via an offer for sale, but Agarwal is unlikely to sell any. He holds more than 30% stake in Oyo’s parent Oravel Stays.

“Oyo is looking at a valuation of more than $12 billion but is looking at the range of anywhere between $12-$15 billion. It wants to price it in a manner that investors can also log listing gains after the IPO,” one of the people cited above said.

On September 23, ET reported Oyo
could file its draft red herring prospectus as soon as next week. Sources said the company is keen to file its DRHP before the month ends, but there’s a possibility that the process may spill over to early October.

A spokesperson of Oyo declined comment for this story.

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The Oyo IPO comes at a time when several top-tier startups—Paytm, PolicyBazaar, Nykaa, PharmEasy, Delhivery, Flipkart, Ola, etc.—have either filed for an initial share sale or are in the process of doing so. In July, Zomato became India’s first consumer internet company to list on the domestic stock exchanges after a stellar IPO.

Oyo’s plans for listing also come amid a sharp recovery in the hospitality sector that was crippled by the pandemic. After retreating from several global markets, 90% of Oyo’s overall hotels or “storefronts” are now in India, Southeast Asia and Europe. It has also completely done away with the “minimum guarantee” concept for its hotel partners where it used to promise them a minimum monthly payout regardless of occupancy rates.



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