It seems like third time’s not a charm, at least in case of Softbank-backed hospitality upstart Oyo. The company has delayed its IPO for a third time, postponing a market debut initially set for this October, reports Bloomberg. The decision comes amid pressure from its largest shareholder, SoftBank Group (which has a stake of over 30% in Oyo), and continued market volatility influenced in part by shifting global trade policies. The IPO could now happen in March next year.
Softbank has asked Oyo to better its earnings and financials further, to get a solid start to its public market journey.
The startup, officially known as Oravel Stays Ltd., had refiled draft documents with the Securities and Exchange Board of India (SEBI) in 2023 following earlier efforts in 2021. However, those plans have now been put on hold once more. The delay also complicates financial matters for Oyo’s founder and CEO, Ritesh Agarwal. In 2019, Agarwal secured a $2.2 billion loan to increase his stake in the company, with the backing of SoftBank founder Masayoshi Son. The first installment of this loan, reportedly $383 million, is due in December. While creditors have hinted at flexibility if a listing occurs this year, the new delay raises questions about how this repayment will be handled, especially since the IPO – which was expected to provide funds for growth, debt reduction, and potentially further expansion – now keeps those plans on hold.
Oyo’s path to going public has been repeatedly interrupted. Its first IPO filing in 2021 aimed at gain a valuation of $12 billion, but regulatory feedback and adverse market conditions led to its withdrawal. A second attempt two years ago reduced the fundraising target to between $400 million and $600 million, but that too was shelved in May 2024 after SEBI requested revisions. Now, a third attempt, intended for this October, has once again been delayed, due to at the insistence of SoftBank, as mentioned ealier. Reports suggest that the new target is now March next year, with Oyo seeking a more modest valuation of around $7 billion. Whether that materializes or gets pushed back again remains to be seen.
In fiscal year 2024, Oyo posted a net profit of ₹230 crore, marking a turnaround from the ₹1,286 crore net loss recorded in FY23. However, revenue declined marginally to ₹5,389 crore from ₹5,464 crore the previous year. More recently, in the October-December quarter of FY25, Oyo reported a sixfold increase in net profit to ₹166 crore and a 31% rise in revenue to ₹1,695 crore year-on-year. Despite the progress, analysts argue that Oyo’s profitability remains fragile.
Oyo’s delayed IPO comes at a time when investor appetite for IPOs has cooled, impacting not just Oyo but other Indian companies such as LG Electronics’ India unit and e-scooter maker Ather Energy, both of which recently scaled back or delayed IPO plans. Still, even as IPO ambitions have stalled, Oyo is moving ahead with a new initiative to enter the food and beverage sector. Under the ‘Townhouse Café’ brand, the company plans to roll out in-house kitchens and quick-service restaurant (QSR) carts in 1,500 of its company-serviced hotels during FY2025–26
