oyo ipo details: SoftBank-backed Oyo files for $1.2-billion IPO

oyo ipo details: SoftBank-backed Oyo files for $1.2-billion IPO

Bengaluru: Oyo Hotels & Homes has filed draft papers with India’s capital markets regulator to raise Rs 8,430 crore (about $1.2 billion) via an initial public offering (IPO), joining a growth list of homegrown startups tapping the public markets.

According to the draft red herring prospectus, the Oyo IPO is going to be a mix of primary and secondary shale sale: Rs 7,000 crore will be raised by issuing fresh stock and the rest via an offer for sale (OFS). In an OFS, existing investors sell their stake, in part or full.

Oyo’s founder Ritesh Agarwal does not plan to sell any shares in the offering,
as ET reported earlier, while largest shareholder SoftBank Group will offload a small stake. Other prominent investors Sequoia Capital, Lightspeed Ventures and Greenoaks Capital Management do not intend to sell.

The company, which is officially known as Oravel Stays Pvt. Ltd., also has the option to raise up to Rs 1,400 crore in a pre-IPO placement. The price band was not disclosed in the DRHP.

The net proceeds of the issue will be utilised to finance prepayment or repayment of borrowings made by Oyo’s subsidiaries. This is to the tune of around Rs 2,441 crore while it will also use Rs 2,900 crore for funding its organic and inorganic growth initiatives. The rest of the amount will be for general corporate purposes.

With the filing of the draft papers, Oyo joins some of India’s top-tier startups—Paytm, Nykaa, Policybazaar, etc.—in making their listing plans public. In July, Zomato
made a stellar debut on the Indian stock exchanges, setting the stage for others of its ilk to follow suit.


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The IPO filing marks a dramatic recovery for Oyo after the pandemic buffeted the travel and hospitality industry. The startup has refashioned itself, moving away from a business model that brought financial stress, soured its relationship with hotel owners and brought on court battles.

The company has also made progress in moving toward profitability despite the pandemic. Its loss for the fiscal ended March 31 narrowed to Rs 3,943 crore compared to Rs 13,122 crore a year ago. Its total income fell by nearly 70% to Rs 4,157 crore due to the pandemic.

The IPO filing also comes when Oyo is embroiled in a years-long legal battle with Zostel which was once its rival. The hostel chain is expecting an interim stay from the Delhi High Court to restrict the SoftBank-backed unicorn from modifying its cap table, including by way of an IPO. The dispute, which dates back to 2016, will be heard next on October 7,
as reported by ET.

Oyo is looking at a valuation of over $12 billion via its IPO,
ET reported on September 23. The company was last valued at $9.6 billion
after raising $5 million as strategic investment from Microsoft Corp.

Kotak Investment Banking, JPMorgan Chase & Co. and Citigroup are global coordinators and bookrunners for the Oyo IPO. ICICI Securities, Nomura Holdings Inc. and JM Financial Ltd. are the other bookrunners.

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