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HomeNewsSoftBank-backed hospitality giant OYO withdraws IPO documents, shifts focus to $450M bond...

SoftBank-backed hospitality giant OYO withdraws IPO documents, shifts focus to $450M bond sale

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OYO, a Delhi NCR-based hospitality unicorn, has officially withdrawn its IPO (initial public offering) documents from the market regulator SEBI. According to the SEBI document, the company has officially withdrawn its IPO papers on May 17, 2024.

This development comes as OYO intends to raise $450 million through the sale of dollar bonds, with JP Morgan expected to lead the financing.

It’s reported that securing $450 million in funding will lead to significant alterations in OYO’s financial reports. According to regulations, OYO must amend its DRHP and submit it to the market regulator with the revised figures.

Continue Exploring: Oyo Hotels plans $450 Million bond sale for refinancing

The startup aims to raise this capital to pay off its term loans of approximately $1.2 billion, which were taken in 2021.

Earlier this week, reports indicated that OYO is seeking new funding at a reduced valuation. The startup reportedly engaged Incred to facilitate discussions with family offices, aiming to raise approximately $80 million to $90 million at a valuation of $2.3 billion. This valuation represents a 77% decrease from the $10 billion valuation of its previous external funding round.

Continue Exploring: OYO in talks with family offices to raise $90 Million in down round

This $80 million to $90 million is reportedly part of a larger funding round that could include a sovereign fund. Earlier, OYO was reported to have discussed raising capital with Malaysia-based sovereign fund Khazanah Nasional Berhad at a lower valuation, but OYO has denied reports of a down round and has not confirmed any talks with Khazanah.

Established in 2012 by Ritesh Agarwal, OYO provides a diverse range of accommodations including holiday homes, casino hotels, coworking spaces, budget hotels, and corporate stays. The company has amassed over $3.5 billion in funding so far, with notable investors such as Peak XV Partners and Microsoft.

In February of this year, Agarwal stated that the startup had achieved its second consecutive profitable quarter. During Q3, the startup reportedly recorded a profit of INR 30 Cr, marking a 2X increase from the INR 16 Cr reported in its initial profitable quarter.

Continue Exploring: JP Morgan extends INR 200 Crore credit facility to fuel Oyo’s expansion

In FY23, the startup’s net loss was INR 1,286.5 Cr, down 34% from INR 1,941.5 Cr in FY22, according to data that is available to the public. There was a 14% rise in operating revenue as well, from INR 4,781.3 Cr in the previous fiscal year to INR 5,463.9 Cr in FY23.

In September 2021, OYO submitted its Draft Red Herring Prospectus (DRHP) to raise INR 8,430 Cr ($1.2 Bn) via an initial public offering.

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