Hotel booking firm Oyo eyes smaller IPO

Indian hotel booking startup Oyo is considering a smaller initial public offering (IPO) or possibly even suspending a public listing altogether as markets remain volatile and largely down, Bloomberg reported Thursday, March 17, citing anonymous sources with inside information. .

Oyo announced in September 2021 that it was planning a public offering in Mumbai to raise around $1 billion. The offer was to consist of a new issue of shares and an offer to sell from the current shareholders.

The startup is operated by its parent company Oravel Stays Ltd. and backed by SoftBank, which has a 46% stake in the company.

See also: Indian Hotel Startup Oyo Prepares for IPO

The IPO as well as Oyo’s targeted $12 billion valuation could be cut in half, the sources told Bloomberg. Oyo did not immediately respond for comment.

Preliminary filings for the IPO were made by Oyo in September 2021 with plans for an IPO in early 2022, but the Draft Red Herring Prospectus (DRHP) has yet to be approved by the Securities and Exchange Board of India (SEBI). So far, none of Oyo’s IPO-related deliberations have advanced far enough in the pipeline to be approved by the board or even formally discussed, the sources said.

Read more: Indian start-up Oyo Hotel to target $9 billion valuation in IPO

Founded in 2015 and based in Gurgaon, India, Oyo was thriving until the pandemic hit in 2020 and halted most travel. At the time, Softbank stepped in to lay off some of Oyo’s workforce and took over a $75 million investment it had made in the company to continue expanding in Latin America. Oyo also scaled back its operations in Japan at the time, PYMNTS reported.

If Oyo’s IPO terms are significantly adjusted, a new DRHP will need to be filed, a source told Bloomberg.

See also: IPO trading volume down 60% from ’21

Transaction volume is down in 2022 compared to 2021, and further transactions are on hold amid slowing economic growth and geopolitical tensions. In January alone, $4 billion in SPAC registrations were dropped.

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