OYO sets mid-February refiling deadline to pursue IPO completion
India: Hospitality chain OYO is planning to refile its draft red herring with the Securities Exchange Board of India [Sebi] by mid-February, as it continues to plot the path ahead for its planned initial public offering [IPO].
While no time estimation has been disclosed for the IPO to take place, OYO internally expects to receive approval from Sebi by April 2023, potentially at the start of the second quarter.
At the end of December, Sebi asked OYO’s parent company [Oravel Stays Ltd] to refile the draft prospectus, updating all the relevant sections such as risk factors, key performing indicators, outstanding litigations and its valuation basis. The company suggested that refiling usually takes around two to three months.
The letter from the market regulator to OYO read: “The disclosures contained in the present draft red herring prospectus do not take into account the material changes / disclosures arising from updated financial statements as filed through addendums leading to revised period for disclosures, which in turn leads to necessities to make material updates in risk factors, basis of offer price, outstanding litigations and update other relevant sections of the prospectus.”
Valued most recently at $9 billion, OYO submitted fresh financial documents in September, 12 months after the company first filed to go public in 2021 with a draft red herring prospectus for a $1.1 billion IPO. Last year, the startup received regulatory approval to submit additional documents in order to go public.
The tumultuous period for OYO continues after the startup announced last month that it would lay off around 600 employees across its product and engineering teams, affecting close to ten per cent of the company’s 3700-strong employee base worldwide.
OYO confirmed that while it was planning to shut down some projects and merge teams, it would hire around 250 new staff members in its sales and relationship management teams to improve the relationships with its consumers and partners. The chain is also looking to recruit more employees who will help it to grow the number of vacation homes and hotels on its platform.
An OYO spokesperson said: “We are working on updating all key sections simultaneously. Responsibilities have been divided among different teams, with senior company leaders driving the collaboration with the book-running lead managers, essentially the initial public offering bankers, the lawyers, and the auditors.
“We are keen on refiling the draft prospectus by mid-February if not earlier,” they added.