OYO plans IPO after September, may settle for lower valuation
According to people familiar with the development, the company is now poised to offer a lower valuation of around $7 billion to $8 billion from its original $11 billion target.
Hotel and travel technology company OYO plans IPO after September and has written to securities regulator Sebi to file updated and updated consolidated financial information.
The company, which submitted preliminary papers to Sebi to raise Rs. 8,430 crore by selling its first shares in October last year, is now poised to offer a lower valuation of around $7-8 crore from the $11 crore , which he originally focused on. , According to people aware of the development.
OYO plans IPO after the September quarter is primarily driven by the prospect of improving its financial performance and current market volatility, they said.
Oravel Stays Ltd, which operates OYO, is understood to have written to Sebi requesting permission to restate the financial statements for the six month periods ended 30 September 2022, 30 September 2021 and 30 September 2020 inclusive.
“Price fluctuations in newly listed shares are a cause for public concern. In the midst of such sentiment it is best to be able to show the first investor that the upturn is real, that it is strong and leading to much higher bookings and may be the first sign of a positive outlook. So OYO will probably stay for a quarter,” said someone with knowledge of the company’s plans.
When OYO asked for comment, OYO declined to comment.
According to the company’s DRHP (Draft Red Herring Prospectus), OYO suffered a loss of Rs 1,744.7 crore in FY21.
The company’s proposed IPO included a new issue of shares with a total value of up to Rs 7,000 crore and an offer to sell based on Rs 1,430 crore, according to DRHP.
However, it has been reported that OYO is just trying to proceed with the main issue of Rs 7,000 crore and get rid of a bid component for the sale of Rs 1,430 crore (SEO) and has contacted Sebi for approval. SEO allows company founders to sell their shares to the public through the stock market.
SEO OYO’s largest investor would have seen Softbank Group sell about 2 percent of its bets, while other investors, Grab Holdings, Huazhu Hotels and Sunil Munjal’s Hero Group Family Office, also narrowed their stakes.
Additionally, when OYO plans IPO and it goes public, it will set a more reasonable valuation of around $7-8 billion, which is below the $11 billion originally targeted given how the stock markets have changed over the past few months, a source said.
When the company filed its DRHP with Sebi in October 2021, markets were buoyant and IPOs received high valuations and oversubscriptions, with global and domestic capital flowing into the stock market.
Since then, however, the situation has changed, with geopolitical turmoil, rising inflation and the cycle of rising interest rates.
When OYO raised $5 million from Microsoft in August 2021, it was valued at $9.6 billion.