SoftBank-Backed OYO Withdraws IPO Documents

Delhi NCR-based hospitality unicorn OYO has officially withdrawn its IPO (initial public offering) documents from the market regulator SEBI. As per the SEBI document, the company has officially withdrawn its IPO papers on May 17, 2024. 

The fresh development has come on the heels of OYO intending to raise $450 Mn through the sale of dollar bonds. JP Morgan is expected to lead the financing. 

It is said that raising of $450 Mn will result in material changes to OYO’s financial statements. As per the regulations, this will need OYO to refile its DRHP with the market regulator with the updated numbers.  

The startup intends to raise this capital to refinance its term loans of around $1.2 Bn that it had taken in 2021. 

Reports earlier this week suggested OYO raising a fresh funding round at marked-down valuation. The startup is said to have roped in Incred to broker talks with family offices to raise about $80 Mn to $90 Mn at a valuation of $2.3 Bn, 77% lower than the $10 Bn valuation at which it raised its last external round. 

It is said that this $80 Mn – $90 Mn is a part of a larger round that is likely to see participation from a sovereign fund. Earlier, OYO was reported to have held talks with Malaysia-based sovereign fund Khazanah Nasional Berhad to raise capital at lower valuation. OYO has denied reports about the down round and did not confirm talks with Khazanah. 

Founded in 2012 by Ritesh Agarwal, OYO offers holiday homes, casino hotels, coworking spaces, budget hotels, corporate stays, and more. The startup has raised over $3.5 Bn in funding till date and counts the likes of Peak XV Partners and Microsoft among its investors.

In February this year, Agarwal claimed that the startup has reported a second consecutive profitable quarter. The startup in Q3 reportedly posted a profit of INR 30 Cr, a 2X jump from INR 16 Cr it had reported in its maiden profitable quarter.

However, if we talk about the publicly available data, the startup saw its net loss decline 34% to INR 1,286.5 Cr in FY23 from INR 1,941.5 Cr in FY22. Operating revenue grew 14% to INR 5,463.9 Cr in FY23 from INR 4,781.3 Cr in the previous fiscal year.  

OYO filed its DRHP in September of 2021 to raise INR 8,430 Cr ($1.2 Bn) through an initial public offering. 

Even as OYO has withdrawn its IPO papers, Delhi-NCR based ixigo has got the SEBI nod for its INR 120 Cr+ IPO. 

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