Oyo Hotels is likely to file an IPO of Rs 8,000 crore next week. Key details to know

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The IPO party on the stock exchanges in India is still ongoing, and in that party the new entrant would be Oyo Hotel and Room, backed by Softbank, which is expected to file an IPO next week, Reuters reported. After the meteoric debut of food aggregator Zomato, the hotel start-up OYO Hotels & Rooms is likely to go public and plans between $ 1 billion and $ 1.2 billion, which is roughly between Rs 7,300 and 8,800 crore . According to media reports, this will be a new issue of shares and an offer to sell from existing shareholders. After Zomato, CarTrade, Paytm, PolicyBazaar, Nykaa and Mobikwik, Oyo is said to be the seventh Indian tech unicorn to launch an IPO. While Zomato and CarTrade have already launched their IPOs, the others have filed papers with Sebi.

The hotel startup was grappling with an existential crisis during the COVID-19 pandemic when the startup was the one to bear the brunt of the pandemic. The startup has been forced to make layoffs and massive pay cuts during the pandemic to stay afloat. Oyo Hotels & Homes has appointed bankers and lead book managers for its national public listing, and is expected to file its draft red herring prospectus (DRHP) by mid-October, the Mint reported.

The company has appointed Kotak Mahindra Capital, Citigroup, ICICI Securities, Nomura and Bank of America as the main book managers for the public issue, the Mint business daily reported. Of the total issuance, up to $ 250 million could come from secondary stock sales and Oyo start-up investors are likely to partially exit with this IPO

OYO recently raised around $ 5 million as part of a strategic investment from Microsoft, which operates in nearly three dozen countries. For the uninitiated, OYO uses its technology stack, helps hoteliers determine the best price for a room, and helps them discover and integrate with third-party hotel reservation services such as booking.com and MakeMyTrip.

The company was recently valued at $ 9.6 billion and had around $ 780-800 million in the bank three months ago and raised $ 660 million in debt in July. The company reported $ 660 million in debt financing from global institutional investors, including Fidelity Investments. According to the company, the proposed issue was underwritten 1.7 times as it received pledges of nearly $ 1 billion from leading institutional investors. Based on the response, the debt deal was increased and increased by 10% to $ 660 million, the company said in a statement.

Ritesh Agarwal, who owns more than 30 percent of the company’s shares, is unlikely to shed any stake, numerous media publications reported. The company, which was last valued at $ 9 billion, is aiming for a valuation of around $ 12 billion to $ 14 billion. Oyo Hotel and Rooms is aggressively investing in technology and recently announced a partnership with global tech giant Microsoft to develop smart room experiences for travelers, such as personalized in-room experiences.

OYO hotels and rooms have made tremendous progress after 2013. After 8 years in India, the company operates in 800 cities in more than 80 countries around the world. The company started its international operations in 2018, starting with Malaysia. It then entered the markets of UK, UAE, Dubai, China, Singapore, Indonesia and others. In 2018, the company became a 100% leased and franchised hotel chain. Last week, shareholders of Oravel Stays, the parent company of hotel company OYO, approved the transformation of the company from a limited liability company to a limited company, according to a regulatory filing, according to the PTI report.

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