(Bloomberg) — Oyo Hotels filed new documents for an IPO in India and faced a challenging market for startup debuts after technology valuations fell.
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The company has submitted its IPO prospectus to Indian authorities, without disclosing the target amount, other financial details or advisers, the Financial Express newspaper said in an announcement on Saturday. In its original attempt to go public in 2021, Oyo had applied to raise 84.3 billion rupees ($1 billion).
Founder Ritesh Agarwal, 29, has been working to get the hotel and accommodation business back on solid footing after the Covid pandemic eliminated global travel and resulted in staggering losses. India’s response to Airbnb was valued at $10 billion in 2019, but SoftBank Group Corp., the company’s biggest backer, lowered that figure to $2.7 billion last year.
The IPO filing marks Oyo’s second attempt to go public, after the Indian Securities and Exchange Commission raised several red flags in its earlier attempt in late 2021. Since then, valuations of tech companies have fallen after accelerating inflation and rising interest rates caused customers to spend less, raising concerns about a possible recession.
The company had been targeting a valuation of about $9 billion last year and updated its IPO documents in early 2022, but the target could now be about a third of its previous target, Bloomberg News reported. Oyo’s IPO valuation is expected to be completed through a bookbuilding process closer to listing.
SoftBank-backed Oyo to scale back planned IPO amid technical headwinds
Agarwal dropped out of college as a teenager to travel the country and founded Gurgaon-based Oyo in 2013. He invented the business as a way to standardize the hotel stay experience in a developing market like India, offering premium linens and high quality speed internet service under the banner of the brand’s bright red OYO logo.
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Agarwal has had to withdraw from certain overseas markets and cut staff during the Covid pandemic. He also moved away from the asset-intensive, capital-intensive business model and focused on building technology as a service.
–With the support of Devidutta Tripathy and PR Sanjai.
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