India: Indian hospitality unicorn OYO is in talks with private equity firm Apollo Global Management to refinance a $660 million loan as the chain aims to reduce its debt in preparation for its initial public offering [IPO], sources familiar with the matter told Bloomberg.
OYO’s parent company Oravel Stays Pvt is reportedly seeking to extend maturity to five years beyond the current 2026 deadline and a final decision could be made as early as next month.
Previously valued at a high of approximately $10 billion, OYO first filed to go public via an IPO in 2021 but its prospective listing has now been delayed multiple times, including in January when the national Indian capital markets regulator, the Securities and Exchange Board of India [Sebi], asked OYO’s parent company to refile its draft IPO papers with certain updates. It has also suffered from plunging valuations for technology firms that also wanted to go public since the Covid-19 pandemic.
Then in March this year, the hospitality chain, which is 47 per cent owned by Softbank, confidentially submitted a “pre-filing” document to resume its IPO this year. OYO has been targeting going public around the Indian festival of Diwali, which falls on 12 November.
The company had earlier planned its initial public offering at $1.1 billion, but this has since been reduced to between around $400 and $600 million despite its announcement of achieving cashflow profitability in July.
On top of that, OYO has undergone a boardroom reshuffle this year, with Varun Jain [OYO India COO] and Gautam Swaroop [OYO Vacation Homes CEO] taking over roles vacated by Ankit Gupta [India CEO] and Mandar Vaidya [head of OYO’s European operations] earlier in 2023.
Some of its key investors include investors such as Lightspeed, Softbank and Peak XV [formerly Sequoia India]. In May, Chinese hospitality company H World Group sold one-fifth of its holding of OYO to UAE-based family offices and institutional investors for around $9 million.
