The most recent update on OYO's initial public offering (IPO) and fundraising strategy in the hospitality startup sector.

OYO Hotels & Homes, a hospitality startup, is abandoning its plans for an initial public offering (IPO), according to sources familiar with the matter cited by the Economic Times (ET). This decision comes amidst a period where various new-age companies, such as FirstCry, Ola Electric, Swiggy, OfBusiness, and Lenskart, are preparing for their debut in the Indian stock market. Originally, OYO had submitted a draft application for an IPO in October 2021.

The decision to withdraw from the IPO has been under discussion for some time, with key stakeholders already informed of the impending move. Instead, OYO is now exploring options to raise funds from private investors over the next six to eight months. However, OYO has denied the accuracy of these reports, stating that they have not been confirmed by company representatives or their IPO advisors.

Previously, OYO's initial IPO filing of $1.2 billion (Rs 8,430 crore) was rejected by regulators in January 2023. Subsequently, the company submitted a revised, smaller-sized IPO application through a confidential filing. With reduced operational expenses, OYO currently holds approximately $200-250 million in cash reserves. The company had raised $660 million through a term loan B in July 2021, with repayment scheduled until late 2025.

SoftBank holds a 46% stake in OYO, while CEO Ritesh Agarwal owns 33%. Other investors include Lightspeed and Peak XV Partners. OYO's last reported valuation exceeded $9 billion (Rs 75,000 crore). The revised IPO filing aimed to raise 40-60% of the original proposal, with Rs 7,000 crore expected to be raised through fresh issues and the remainder through an offer-for-sale (OFS) mechanism.