Oyo Submits Draft Paper for Initial Public Offering

Oyo is planning to raise about $1.16 billion in an initial public offering. Oyo plans to issue new shares worth up to 70 billion rupees while existing shareholders could sell shares worth up to14.3 billion rupees.

Some of the start-up’s prominent backers include SoftBank Vision Fund, Lightspeed Venture Partners and Sequoia Capital India. According to the draft prospectus uploaded by ICICI Securities, which is one of the books running lead managers for the IPO, Oyo would also consider issuing shares worth up to $193 million in a pre-IPO placement.

The firm said it would use proceeds from the IPO to pay off existing obligations and fund growth, which could include mergers and acquisitions. Indian startup company’s technology allows hoteliers to accept online bookings and payments through its platform, among other services. The start-up has expanded beyond India and into the U.S., Europe and Southeast Asia. It considers India, Indonesia, Malaysia and Europe as its core growth markets.

Last year, a New York Times report cast doubt on the Indian start-up’s financial health, highlighting questionable tactics employed in the pursuit of growth. The coronavirus pandemic has knocked the hospitality sector and the Indian hotel chain, laid-off employees, to cut costs and losses.The company faced a lot of crises during the pandemic.  The hotel startup made a loss of $528 million on a total income of $600 million in the financial year that ended in March this year.