OYO considering for 50% smaller IPO: Report

Oyo filed preliminary documents in September, with the goal of going public in early 2022.

According to individuals familiar with the matter, Oyo, the high-profile inexpensive hotel company that filed for an initial public offering last year, is considering cutting its fundraising objective in half or perhaps cancelling the debut.

Faced with obstacles like falling stock markets, Oyo-operator Oravel Stays Ltd. may reduce its Indian IPO from almost $1 billion to half that amount, according to individuals who asked to remain anonymous because they were discussing internal concerns. According to the sources, it is also considering lowering its estimated valuation from the $12 billion that was initially planned. According to the sources, Oyo might even opt to postpone its IPO.


The discussions highlight investors’ reluctance to participate in IPOs during a period of exceptional market turbulence. After Paytm’s poor debut, the Airbnb Inc.-backed firm contemplated decreasing its goal valuation to $9 billion early this year – but that was before the Ukraine war and inflationary fears sparked a worldwide tech selloff.

Oyo, which is backed by investors such as SoftBank Group Corp and Sequoia Capital, filed preliminary documents in September with the intention of going public in early 2022. The original documents, known as a draught red herring prospectus, are still to be approved by India’s stock exchange regulator over six months later.

According to the sources, none of Oyo’s IPO-related negotiations has progressed far enough to warrant official board discussion or approval. A request for comment from Oyo reps was not immediately returned.

Oyo’s hesitation is symbolic of cooling in India’s unicorn-mining technology industry, where almost 50 businesses received venture capital at $1 billion or higher values in 2021 alone. This year, there have been hints of slower fundraising and lower values as investors reconsider. The most noticeable slowing has been in the IPO market, as falling stock prices hampered investor interest.

SoftBank, Oyo’s main investor and one of the most prolific dealmakers in Indian companies, is now treading more cautiously in its investments in the country. According to a source familiar with the situation, the Japanese business, which remained optimistic throughout last year, withheld funds for at least two firms after sending out term sheets, or agreements outlining the terms and conditions of an investment.

The two businesses were in the e-commerce and software-as-a-service sectors, where values have dropped significantly. According to one of the sources, if Oyo decides to dramatically change the parameters of its IPO, it will need to submit a new DRHP.

Many other firms that have had their IPOs approved have opted not to proceed. API Holdings, which handles the online pharmacy Pharmeasy, and Delhivery Ltd.’s almost $1 billion IPO have both been delayed. In January and February of this year, Delhivery and API gained regulatory authorization.