IPO-bound hospitality unicorn OYO which is going to file its draft red herring prospectus (DRHP) with the market regulator SEBI in next 10 days is likely to have around 75% primary component and the remaining 25% as the secondary component in its offer.
According to sources, OYO’s IPO offer will include fresh issues of share ranging between 70% to 80% of the offer, and the remaining will consist of secondary issues, meaning the shareholders in the company will sell some portion of their shares.
OYO is likely to go for an IPO ranging between $1 Bn to $1.2 Bn. Based on calculations, the hospitality unicorn is likely to issue fresh shares worth $700 Mn to $800 Mn and the rest which is likely to be around $200 Mn will be offered for sale. The startup is eyeing for $12-$14 Bn valuation and has shortlisted investment banks such as JP Morgan, Kotak Mahindra Capital and Citi to manage its IPO.
As per a ET report, OYO’s founder Ritesh Aggarwal who holds around 30% stake in the hospitality unicorn is not likely to offload any shares during the anticipated IPO. At present, SoftBank holds 46% shares in the company, Agarwal holds 34%, about 7% of shares are held by employees and the remaining shares are held by other investors, Inc42 had reported earlier.
Founded by Agarwal in 2013, the startup is backed by marquee investors such as Masayoshi Son’s SoftBank, Airbnb, Lightspeed Venture Partners, Innoven Capital, Hero Enterprises among others.
OYO last raised $5 Mn from US tech giant Microsoft in exchange for 5 equity shares and 80 preference shares at a valuation of $9 Bn. Earlier in July, the startup closed $660 Mn in term loan funding from global institutional investors. The Gurugram-based company said that the offer was overscribed by 1.7 times and the company received commitments of close to $1 Bn institutional investors.
In the hospitality space, OYO follows the suit of Gurugram-based startup ixigo, which has filed its DRHP and is heading for an INR 1,600 Cr IPO. Earlier this year, another online travel portal EaseMyTrip went for INR 510 Cr IPO and only recently crossed a $1 Bn market cap.