Oyo Hotels & Homes aims for $9 billion valuation in IPO
Oyo Hotels & Homes, that struggled during the pandemic, is aiming for a $9 billion valuation in its initial public offering after early discussions with potential investors.
After filing preliminary filings last year, the SoftBank Group Corp.-backed startup is expected to obtain the go light to proceed with the offering this week or next, according to the source. Following regulatory permission, a formal roadshow will begin to decide final pricing.
Oyo's target valuation would be lower than the $12 billion first reported in local media last year, and likely lower than the $10 billion it reached in 2019.
According to the person, the business, helmed by 28-year-old Ritesh Agarwal, has explored proposing a discount of up to 15% on the $10 billion recommended by bankers during early conversations.
As Oyo Hotels & Homes prepares to create an order book from institutional investors, executives are keeping an eye on IPO demand, according to one of the persons. According to another source, the downturn in US tech equities may be weighing on values.
The digital payments company raised a record $2.4 billion in its November IPO, but shares have already dropped to approximately half their IPO price.
Oyo's IPO will be one of the most significant since Paytm's. The company claimed in its preliminary filing that it wanted to raise Rs 8,430 crore by selling new shares as well as some secondary shares, or those owned by existing investors.
The startup's expansion was abruptly halted due to the Covid-19 outbreak. In many markets, Agarwal had to cut back and lay off thousands of workers. He described the outbreak as "a cyclone" that devastated Oyo in an interview.
The company has also changed its business model. Its current concentration is on selling software and support services to hoteliers, resorts, and homeowners, as well as providing a booking platform for travellers. However, it no longer guarantees revenue to partners.
Despite a drop in revenue in the fiscal year that ended in March 2021, Oyo made headway toward profitability. According to data submitted with the stock market regulator, it lost Rs 3,930 crore in the fiscal year, down from Rs 12,800 crore the year before.
Oyo filed its initial filings on September 30th and has since met with the Securities and Exchange Board of India to discuss a number of issues, including a legal dispute with Zostel Hospitality Pvt. Ltd.
After filing preliminary filings last year, the SoftBank Group Corp.-backed startup is expected to obtain the go light to proceed with the offering this week or next, according to the source. Following regulatory permission, a formal roadshow will begin to decide final pricing.
Oyo's target valuation would be lower than the $12 billion first reported in local media last year, and likely lower than the $10 billion it reached in 2019.
According to the person, the business, helmed by 28-year-old Ritesh Agarwal, has explored proposing a discount of up to 15% on the $10 billion recommended by bankers during early conversations.
As Oyo Hotels & Homes prepares to create an order book from institutional investors, executives are keeping an eye on IPO demand, according to one of the persons. According to another source, the downturn in US tech equities may be weighing on values.
The digital payments company raised a record $2.4 billion in its November IPO, but shares have already dropped to approximately half their IPO price.
Oyo's IPO will be one of the most significant since Paytm's. The company claimed in its preliminary filing that it wanted to raise Rs 8,430 crore by selling new shares as well as some secondary shares, or those owned by existing investors.
The startup's expansion was abruptly halted due to the Covid-19 outbreak. In many markets, Agarwal had to cut back and lay off thousands of workers. He described the outbreak as "a cyclone" that devastated Oyo in an interview.
The company has also changed its business model. Its current concentration is on selling software and support services to hoteliers, resorts, and homeowners, as well as providing a booking platform for travellers. However, it no longer guarantees revenue to partners.
Despite a drop in revenue in the fiscal year that ended in March 2021, Oyo made headway toward profitability. According to data submitted with the stock market regulator, it lost Rs 3,930 crore in the fiscal year, down from Rs 12,800 crore the year before.
Oyo filed its initial filings on September 30th and has since met with the Securities and Exchange Board of India to discuss a number of issues, including a legal dispute with Zostel Hospitality Pvt. Ltd.
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