Oyo Planning Rs 68,000 Crore IPO, With 15% Discount For Investors: Bigger Than Paytm IPO?
The hospitality and OTA homes and living spaces major Oyo Hotels & Homes is eyeing a valuation of $9 billion in its long awaited initial public offering, cited people known to the development.
Oyo had decided to raise capital through its IPO last year, after it closed a debt financing round of $660 million from institutional investors, in order to do away with some existing debts and push its product tech and operations.
Latest Development on OYO’s IPO Process
The Softbank-backed domestic company is currently known to be in conversations with the Securities and Exchange Board of India (SEBI) and awaits its green signal for proceeding with its IPO round, pegged to happen within a week or two.
This will roll out once the company receives regulatory approval and after the final pricing is determined.
Moreover, the IPO’s valuation is targeted at $9 billion, lesser than the $12 billion reported by local media last year and probably lower than the $10 billion level the startup hit in 2019, cited a Bloomberg report.
Also, the Ritesh Agarwal-owned hospitality startup will be discussing a discount of 15% on the $10 billion suggested in early discussions by the bankers, which an OYO representative declined to comment on.
Executives are on a close watch on IPO demand, as OYO is preparing to build an order book from institutional investors. Moreover, a downside in tech stocks in the U.S. may weigh on valuations, stated a person privy to the matter.
OYO’s IPO After Paytm’s Disastrous Listing
Oyo’s listing will be among the biggest IPOs in the market since Paytm’s last year in November, which faced a disastrous result.
Also, OYO plans to raise a total of about Rs 8,430 billion or $1.1 billion through its listing, via the sale of new shares and some secondary shares, or those held by existing investors, added the Bloomberg report.
As per information, the IPO will majorly comprise of primary shares, or those sold by the company, along with a smaller portion of secondary stock.
However, SoftBank which holds 47% of equity in the hospitality major will sell a small of its shares in the company, while Oyo’s founder Ritesh Agarwal, who holds 33% stake in the company will not dilute his share.
Along with him, Lightspeed Venture Partners, Sequoia Capital, Star Virtue Investment (Didi), Greenoaks Capital, AirBnB, HT Media and Microsoft are also reported to not offload their stakes through the IPO.