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OYO to file DRHP for $1 bn IPO next week; eyes $10-12 bn valuation

OYO to file DRHP for $1 bn IPO next week; eyes $10-12 bn valuation

The IPO size is estimated to be around $1.2 billion, three-fourths of which will be generated from fresh issue and the rest will come from offer for sale by existing shareholders

The SoftBank-backed firm was valued at $9.6 billion in August when it secured $5 million from Microsoft. Photo: Reuters The SoftBank-backed firm was valued at $9.6 billion in August when it secured $5 million from Microsoft. Photo: Reuters

Budget hospitality chain OYO is set to file a draft red herring prospectus (DRHP) for its initial public offering (IPO) with the Securities and Exchange Board of India (SEBI), sources familiar with the development told Business Today.
The unicorn startup plans to file the draft prospectus next week for the IPO, which comprises fresh issue as well as offer for sale, said one of the persons cited above.

The IPO size is estimated to be around $1.2 billion, three-fourths of which will be generated from fresh issue and the rest will come from offer for sale by existing shareholders.

The Gurugram-based company is eyeing a market valuation of $10-$12 billion, said one of the people, requesting anonymity. OYO is likely to launch the IPO by the end of this year or early next year, depending on clearances from the regulator.

Also read: Oyo may file for $1.2 bn IPO next week

The SoftBank-backed firm was valued at $9.6 billion in August when it secured $5 million from Microsoft. In July, it raised debt funding worth $660 million from Fidelity Investments and others.

Ola's other investors include Airbnb, Lightspeed Venture Partners, Sequoia Capital, and Salesforce Ventures.
OYO, which aggregates bookings for budget hotels around the world, found itself among the worst hit sectors and businesses as Covid-19 brought global travel and tourism to a halt in early 2020.

Oyo focuses on two core businesses -- hotels and holiday homes. The company was forced to make layoffs and pay cuts to prune losses even as markets began showing signs of recovery post the second wave that peaked in April-May this year.

Also read: Meet Sanjay Mehta, India’s only angel investor with four unicorns under his belt

OYO joins a slew of Indian consumer internet companies that are set to hit the public market in the near future following the strong stock market debut of foodtech platform Zomato. Mobility firm Ola, fintechs Paytm and Mobikwik, insurtech and lending platform PolicyBazaar, logistics startup Delhivery, and beauty marketplace Nykaa are all preparing to launch on the public market soon.

On Wednesday, Chennai and San Mateo-based software-as-a-service (SaaS) company Freshworks Inc debuted on the Nasdaq after completing an IPO worth over a billion dollars, at a market cap of $10.13 billion.

Also read: IPO-bound Oyo raises $5 mn from Microsoft at $9.6 bn valuation