One of India’s biggest hospitality startups Oyo Hotels is expected to file for an initial public offering (IPO) next week to raise nearly $1.2 billion (around Rs 8,000 crore), news agency PTI reported on Thursday, quoting sources. The company is expected to file the draft red herring prospectus with Sebi next week.
According to PTI, Oyo has appointed investment banks like JP Morgan, Citi and Kotak Mahindra Capital to manage its public issue.
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The IPO will consist of a fresh issue of shares and an offer for sale from existing shareholders reported Reuters.
While the company has not yet responded to the news, it is being said that the proposed initial public offer (IPO) plan of the hospitality firm is in alignment with the success of food delivery giant Zomato’s IPO that ended with a bumper oversubscription on July 16, and was the biggest since March 2020.
This comes after shareholders of Oravel Stays, which is the parent company of Oyo, had approved last week the conversion of the company from a private limited company to a public limited company, said a regulatory filing.
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Earlier, Oravel Stays board members had approved a raise in the authorised share capital of the company from Rs 1.17 crore to Rs 901 crore.
OYO in August also opened up about its colossal investment and informed in a Registrar of Companies (RoC) filing that tech giant Microsoft Corporation has invested nearly USD 5 million (about Rs 37 crore) in the company. The investment took place by issuing equity shares and compulsory convertible cumulative preference shares on a private placement basis.
Before that, the company in July raised some $ 660 million through the term B loan route from global institutional investors, which included Fidelity Investments to refinance and simplify its existing borrowings.
In March this year, OYO founder and Group Ritesh Agarwal said that the company, which suffered a massive setback due to COVID-19 induced lockdown was on a path to resurge its growth.
“OYO is on a steady path of a resurgence in 2021 and is seeing signs of recovery across India, Europe, and Southeast Asia. OYO’s survival through the COVID crisis and our resurgence shows that we are a company with strong fundamentals and high-value potential,” he said.