The IPO party on the bourses in India is still on, and in this party, the new entrant would be Softbank backed Oyo Hotel and Room, which is expected to file for an IPO next week, the Reuters reported. After the stellar debut of food aggregator Zomato, the hospitality startup company OYO Hotels & Rooms is likely to go public and is eyeing between $1 billion – $1.2 billion which is approximately between Rs 7300 – 8800 crores. As per the media reports, this will consist of a fresh issue of shares and an offer for sale from existing shareholders. After Zomato, CarTrade, Paytm, PolicyBazaar, Nykaa, and Mobikwik, Oyo would be the seventh Indian tech unicorn to roll out an IPO. While Zomato and CarTrade have already rolled out their IPOs, the others have filed papers with Sebi.
The hospitality startup grappled with an existential crisis during the COVID-19 pandemic when startup was the one which bore the brunt of this pandemic. The startup was necessitated to go for lay offs and massive salary cuts during the pandemic to stay afloat. Oyo Hotels & Homes has appointed bankers and lead book managers for its domestic public listing, and is expected to file its draft red herring prospectus (DRHP) by mid-Octobere the Mint reported.
The company has appointed Kotak Mahindra Capital, Citigroup, ICICI Securities, Nomura and Bank of America as lead book managers for the public issue, the business daily Mint reported. Of the total issue, up to $250 million could be in secondary share sales and early-stage investors of Oyo are likely to make a partial exit through this IPO
OYO recently raised about $5 million in a strategic investment from Microsoft, which operates in nearly three dozen countries. For the unversed, OYO uses its technology stack, helps hoteliers determine the best price for a room and helps them with discoverability and integrations with third-party hotel booking services such as booking.com and MakeMyTrip
The company was recently valued at $9.6 billion and had about $780 million to $800 million in the bank as of three months ago and raised $660 million in debt in July. The company reported the debt funding worth $660 million from global institutional investors, including Fidelity Investments. According to the company, the proposed issuance was subscribed 1.7 times as it received commitments of close to $1 billion from leading institutional investors. Based on the response, the debt deal was upsized and increased by 10 per cent to $660 million, the company said in a statement.
Ritesh Agarwal who has over 30 per cent stake in the company is unlikely to offload any stake, many media publications reported. The company which was last valued at $9 billion is targeting a valuation of around $12-14 billion. Oyo Hotel and Rooms,is aggressively investing in technology and recently announced a partnership with global tech giant Microsoft to develop smart room experiences for travelers such as customized in-room experiences.
The OYO Hotels and Rooms made huge strides after 2013,. after 8 years of establishment in India, the company operates in 800 cities in more than 80 countries of the world. The company started its international operations in 2018 starting with Malaysia. It then entered into the markets of the UK, UAE, Dubai, China, Singapore, Indonesia, and others.In 2018, the company became a 100 per cent leased & franchised hotel chain. Last week, shareholders of Oravel Stays, the parent company of hospitality firm OYO, had approved the conversion of the company from a private limited company to a public limited company, according to a regulatory filing, as per the PTI report.