OYO
[Credit: OYO]

OYO denies suggestions of abandoning IPO process

India: Indian hospitality chain OYO has denied reports that it is looking to abandon its planned initial public offering [IPO] this year.

Following a report in the Economic Times that the group had met with regulators to speed up the IPO process, it was suggested that OYO could back out altogether.

An OYO statement provided to Skift read: “The company denies any rumours about withdrawing the IPO.”

After several delayed attempts to close its long-awaited IPO, it was revealed in January that OYO had entered into discussions with Malaysian sovereign wealth fund Khazanah Nasional Berhad ahead of a potential pre-IPO $400 million funding round. It is believed that the company is still considering going public via an IPO, but it is also exploring alternative options to raise funding via private investors.

At the time, sources told Inc42 that the company was seeking to achieve a valuation of around $6 billion through the investment. OYO was previously valued at a high of approximately $10 billion.

In October, it was revealed that OYO was attempting to raise $250 million from investors, with a substantial portion of the funding being directed to settling the company’s $660 million term loan B and eliminating its debt ahead of a planned initial public offering [IPO]. Reports also emerged that OYO was in talks with private equity firm Apollo Global Management to refinance the aforementioned $660 million loan, which currently has a deadline in 2026, ahead of the planned IPO.

Softbank-backed OYO first filed to go public via an IPO in 2021 but its prospective listing has been delayed multiple times due to volatile market conditions, including in January last year 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.

The company confidentially submitted a “pre-filing” document to resume its IPO in March last year.

OYO’s most recent notable funding came from global tech corporation Microsoft, which invested $5 million in the hospitality chain at a $9 billion valuation in 2021.

Some of OYO’s key investors include the likes of Lightspeed, Softbank and Peak XV [formerly Sequoia India].

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