Oravel Stays, the parent company of Oyo Hotels, has reportedly pulled back its draft IPO documents filed with Sebi in March 2023, according to sources familiar with the matter as told to TOI. This marked Oyo’s second endeavor to go public. In an internal townhall meeting with employees, founder Ritesh Agarwal is said to have mentioned that the company is seeking new funding from investors at a valuation ranging from $3 to $4 billion, significantly lower than its peak valuation of $10 billion.
Oyo declined to provide a comment on the matter. It is speculated that the potential funding round could amount to $70-90 million.
OYO applies for IPO
The company intends to reapply for IPO once it completes the refinancing of its $450 million loan. Oyo is nearing finalization of its refinancing arrangements, aiming to raise $350-450 million through a bond issuance at an annual rate of 9-10%. “The refinancing will lead to significant changes in Oyo’s financial statements. According to regulatory requirements, it will need to amend its filings with the regulator. Given the advanced stage of the refinancing decision, it is not practical to continue pursuing IPO approval with the current financials. It is prudent to withdraw the current application,” a source explained. Insiders at Oyo reported that the company recorded a net profit of Rs 99 crore in FY24.
The company initially filed for IPO in 2021, aiming to raise $1.2 billion. However, Sebi requested the company to submit updated IPO documents with relevant additions. Amidst a global tech downturn and a reassessment of valuations, several new-age firms, including them, reconsidered their IPO plans. In its second IPO attempt, the company filed for a smaller IPO via the confidential route, seeking to raise $400-600 million through a fresh issuance of shares. A portion of the latest funding will be allocated towards debt reduction, sources indicated.
