Oyo is eyeing to raise bulk USD 950 million (Rs. 7000 crore) by issuing new shares while the remaining is expected to be raised via offer for sale.
Oyo Hotels and Homes, a hospitality startup, has filed draft documents in the Indian Stock Exchange market to raise an IPO worth $1.2 billion (Rs. 8,430 crore) after getting approved by Securities and Exchange Board of India (SEBI).
Along with more than 270 IPOs in 2021 so far, Oyo steps ahead in joining the group of publicly listed companies in the Indian startup ecosystem which is anticipated to come into effect by 2022. Oyo is eyeing to raise bulk USD 950 million (Rs. 7000 crore) by issuing new shares while the remaining is expected to be raised via offer for sale.
The offer for sale will allow existing shareholders including Softbank (SVF India), A1 Holdings, Global IVY Ventures, China Lodging, etc. to sell their shares partly or in full.
As per Moneycontrol reports, Gurgaon-based hospitality firm’s founder Ritesh Agarwal will not be divesting his stake in the forthcoming IPO. Besides him, few other investors who are perhaps not participating in divesting in the public offering include Sequoia Capital, Lightspeed Venture Partners, Greenoaks Capital, Start Virtue Investment, AirBnB, Microsoft and HT Media.
Oyo is expecting the IPO to raise the startup’s market worth to $12 billion to $14 billion. The proceeds from the public issue will be utilized by the startup in payment and repayment of some debts. It will additionally be utilized for spurring the startup’s growth by launching growth schemes in future.
Oyo Rooms was in highlights in August 2021 when it started discussing raising IPO with banks including JP Morgan, Citi and Kotak Mahindra Capital by the end of 2021.
With the pandemic affecting the hospitality segment in a very impactful way, the related businesses are transforming the organization digitally to make it convenient for users to book hotels following the pandemic-based measures laid down. Oyo, already on the platform, lets its users book hotels in the desired location at a range of different prices.
Founded in 2013, Oyo has elevated its growth by expanding operations across more than 80 countries covering Asia, Europe and America.
Oyo raised around $660 million via debt financing from foreign institutional investors in July 2021. In the same month, the startup roped in Microsoft as a potential investor to invest in its corporation. After the deal with tech-giant Microsoft, Oyo is in talks to be working on developing ‘smart room’ services for its users.