EXCLUSIVE: OYO’s $1.2 bn IPO likely in March, may seek $9.6 bn valuation

Hospitality unicorn OYO is targeting to list on the domestic stock exchanges in March, ahead of the new financial year, top sources privy to the development told Business Today. “OYO is expecting the SEBI nod to come by second week of February and the listing is on track. Currently the company is in talks with high-net-worth individuals, institutional investors for the anchor book allotment and is looking at a valuation of $9.6 billion,” sources familiar with the company operations said.

 

This comes at a time when the other tech start-ups are in a wait-and-watch mode especially in the face of the rout listed new-age companies saw on the stock exchanges last week.

 

The above source stated that the company may seek a valuation of $9.6 billion, at which a pre-IPO round was done. Two weeks before, OYO raised Rs 230 crore in a pre-IPO placement at a $9.6 billion valuation which mostly involved the ESOP sale by existing employees. HNIs based in Middle East and the Doha-based Qatar Insurance Company participated in the pre-IPO round .

“It is very unlikely the company will look to raise further funds in a pre-IPO. The anchor road show and listing is now on the cards,” the sources added. 

 

OYO’s $1.2 billion IPO will be one of the most watched public listings by tech start-ups in 2022, in terms of the quantum of the capital raise and in the face of tech stocks tumbling on stock exchanges over the last one week.

 

“There are concerns of course because of the market situation overall, but Ritesh Agarwal ‘s team is really keen on the listing and therefore approached stock exchanges for the in-principle approval which has been granted. SEBI’s nod is awaited and then it is a matter of some days,” one of the source said.

 

Notably, OYO has submitted its responses to the observations made by the markets regulator, SEBI after a smaller rival, Zostel and Federation of Hotels and Restaurant Association of India wrote to SEBI claiming that OYO made inadequate disclosures in its Draft Red Herring Prospectus (DRHP).

 

During the last fund raise in August 2021, Microsoft invested $5 million in OYO at a $9.6 billion valuation. Prior to this, the hospitality chain raised $660 million in debt from institutional investors. The company is seeking to raise Rs 8,430 crore or $1.2 billion through the public listing.

 

 The offer comprises fresh issuance of up to Rs. 7,000 crore or $966 million and an offer for sale aggregating up to Rs 1,430 crore or $197 million.

Business Today did reach out to OYO for a response on this matter, but they declined to comment.

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