IT giant Microsoft is in talks to invest in online hotel chain Oyo at a $9 billion valuation before Oyo's IPO. The deal between Microsoft and Oyo could be declared in the coming weeks and is likely to be a precursor to the hotel chain's IPO.
In case the deal is materialised, Oyo might also utilise Microsoft's cloud services. Oyo founder and CEO Ritesh Agarwal said that the Gurgaon-headquartered company is mulling a likely public offering but he did not provide a deadline, Reuters reported.
The SoftBank-backed Oyo is the largest hotel chain in India and sixth largest globally. Founded by Ritesh Agarwal in 2013, it aggregates bookings for budget hotels around the globe. Oyo is present in over 415 Indian cities with 18,000 properties in India. It has over 1 million rooms globally and over 23,000 exclusive hotels across 800 cities.
COVID-19 pandemic skewered the hotel chain's business as it saw massive layoffs, cost cuts and losses. Earlier this month, Oyo Hotels & Homes secured $660 million in debt financing from global institutional investors to service its existing loans. Besides servicing its existing loans, the online hotel aggregator aims to recover from the losses caused due to COVID-19 second wave.
This funding round involved Fidelity Investments, Varde Partners and Citadel Capital Management. The hospitality company is the first Indian firm to raise capital via term loan B (TLB) route. TLB refers to a portion of senior secured syndicated credit facility from international institutional investors.
Edited by Mehak Agarwal; with Reuters inputs
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