Hospitality company OYO Hotels and Homes project to launch its initial public offering (IPO) this year. Reportedly, the company has set a deadline of September to file its draft red herring prospectus. It intends to go public before the calendar year ends.
The Ritesh Agarwal-helmed company discussed discussions with bankers such as JP Morgan, Citi, and Kotak Mahindra Capital to accomplish the public issue, as mentioned in a report in The Economic Times. An administrator aware of the development reported that work had begun daily, and some bankers settled.
Another person reported that many details are yet to be filed, including the offered size. An OYO spokesperson wanted to comment. With COVID-19 cases ebbing in India and Europe and increasing vaccination rates, OYO sees a revival of its business. It hopes that India would reflect a strong recovery once more people are vaccinated, similar to the case in Europe.
The pandemic severely impacted the hospitality sector. OYO, too, witnessed its fortunes turn downward. It cut down its operations in markets like the US and China and fired a portion of its workforce in India. India and Southeast Asia account for 43 per cent of the company’s revenues. In comparison, 28 per cent comes from Europe and the rest of the markets. To this end, IT giant Microsoft reportedly is in conversations to invest in the company at a valuation of $9 billion. The deal between Microsoft and OYO could be revealed soon. In case the deal materialises, OYO might also utilise Microsoft’s cloud services. Additionally, OYO resolved a debt financing round of $660 million from global institutional investors to service its existing loans. Fidelity Investments, Varde Partners, and Citadel Capital are assumed to have participated in the funding.