Oyo IPO: India's Hotel Chain Seeks $1.2 Billion

Oyo Plans Imminent IPO Filing

Oyo, the Indian budget hotel chain startup, is preparing to submit its application for an initial public offering (IPO) as early as next week, according to sources familiar with the situation who spoke with TechCrunch.

This move positions Oyo among a growing number of companies in India, the world’s second-largest market, actively pursuing public market opportunities.

IPO Details and Valuation

Founded by 27-year-old Ritesh Agarwal seven years ago, the company intends to secure up to $1.2 billion through a combination of primary and secondary sales during the IPO.

The startup is targeting a valuation exceeding $12 billion, as indicated by individuals with knowledge of the matter, who requested to remain anonymous due to the confidential nature of the discussions.

These terms are subject to potential adjustments in the coming days, and the filing of the necessary documentation may be delayed slightly.

Following in the Footsteps of Other Indian Tech Firms

Oyo’s plans mirror those of other Indian companies like Zomato, Paytm, and PolicyBazaar, which have already listed on Indian stock exchanges.

It is reported that Agarwal himself does not intend to divest any of his holdings as part of the IPO.

Financial Standing and Investment

The firm boasts a strong investor base, including SoftBank, Lightspeed Partners, and Airbnb.

Its most recent valuation stood at $9.6 billion.

As of three months ago, Oyo held approximately $780 million to $800 million in cash reserves, as publicly stated by Agarwal at a recent conference.

Furthermore, the company secured $660 million in debt financing in July.

Technological Infrastructure and Global Reach

Oyo recently received a $5 million strategic investment from Microsoft.

The company operates across nearly three dozen countries globally.

It has developed a proprietary operating system designed to facilitate digital bookings and payments for hoteliers.

Leveraging its technology, Oyo assists hoteliers in optimizing room pricing, enhancing discoverability, and integrating with prominent hotel booking platforms like booking.com and MakeMyTrip.

Recovery from the Pandemic

The travel and hospitality sector, including Oyo, experienced significant disruption due to the pandemic.

However, the company has demonstrated substantial recovery in recent months.

Key Revenue Markets

Currently, the majority of Oyo’s revenue is generated from a select number of markets, including India, Malaysia, Indonesia, and Europe.

These regions have eased lockdown restrictions as vaccination rates increase.

Agarwal's Previous Statements

In a July interview with Bloomberg TV, Agarwal indicated that the startup was “already operating like a public company,” but refrained from confirming any immediate IPO plans.

The company has not issued any further official statements regarding its IPO intentions.

This article was updated on Friday at 3:26 PM IST to include the valuation information.