When will Oyo IPO come?

19 Jul 2022 , 02:42 PM

Oyo Rooms filed Draft Red Herring Prospectus (DRHP) for its $1.1 billion IPO in September 2021. The company has still not got green light from  SEBI for its IPO. According to reports, the company is going to file addendum to its DRHP. This addendum will give its financial result for the entire 2021-22 financial year. The delay in getting SEBI approval happened because Oyo sought to file an updated DRHP with SEBI. 

COVID restrictions severely disrupted the business model of OYO. If Covid lockdowns and other restrictions had not been imposed, then Oyo’s IPO would have been among the most eagerly awaited IPOs. The company has changed the budget hotels scene of India. Its business model based on standardization of every aspect of a hotel service created thousans of clean, comfortable and affordable hotel rooms across the country. 

The recent falls seen in Indian equity markets have dampened OYO’s desire to launch its IPO in the near term. If it floats its IPO now, it is bound to get lower valuations for its shares.  On the positive side, travel demand is reviving strongly. If OYO floats its IPO in the beginning of next year or in the first half of next year, then it is likely to get much higher valuation. So there is a very strong probability that the IPO of the company will not come in 2022, but in 2023. 

Proceeds from the IPO, whenever it happens, will be used for reducing the debt of the company and for other corporate purposes. Soft Bank owns 46.62% stake in Oyo. Founder and CEO Ritesh Agarwal owns 8.21% stake in the company. 

https://www.indiainfoline.com/oyo-ipo/