Oyo isn’t a new name in the Indian unicorn circles. It grew steadily before the hospitality industry was hit hard by the pandemic, which confined people to their homes and forced hotels and restaurants to close. Subsequently, Oyo struggled during the first wave, clocking a net loss of ₹3929 crores in the fiscal ending March 2021. With time, however, it started to recuperate and navigate through the pandemic. Last year, it filed for an IPO, and now, it is eyeing a valuation of nearly $9 billion.
When it had filed to go public, the hospitality firm had aimed to reach a valuation of about $12 billion. After preliminary conversations with potential investors, though, it is eyeing $9 billion, which is lower than the $10 billion level the startup had hit back in 2019. Oyo had also discussed offering a discount of as much as 15% on the $10 billion suggested by bankers during early discussions
It is very likely that it will get approval from the Securities and Exchange Board of India (SEBI) for the IPO within the next couple of weeks. Once it gets the green light, a formal roadshow will initiate and determine the final pricing.
IPOs had been one of the buzzwords of 2021, alongside startups, funding, and unicorns. Zomato reached the skies with its spectacular IPO in July, inspiring others to do the same. PolicyBazaar, Paytm, Rivian, and Nykaa were some of the startups that went public last year.
Oyo’s IPO is set to consist mainly of primary shares, or those sold by the company, and a smaller portion of the secondary stock. SoftBank, one of the biggest backers of Oyo with a stake of 47%, will sell a percentage of its shares. Oyo founder Ritesh Agarwal, as well as existing investors Sequoia Capital, Lightspeed Ventures, and Greenoaks Capital Management, will not be selling shares either.
Founded in 2013 by Agarwal, Oyo’s offering is set to be among the biggest IPOs since the disappointing one of Paytm. In its DRHP, Oyo had stated its plans to raise nearly $1.2 billion through the IPO. Today, Oyo not only provides a comfortable room stay but also provides full-stack technology to entrepreneurs and small businesses with hotels and homes. Additionally, it provides a platform for travellers to have access to affordable accommodation, which can be booked instantly.