Gurugram-based hospitality chain OYO IPO 2021: sources

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Gurugram-based hospitality chain OYO IPO 2021: sources

Sources aware of the Gurugram-based unicorn's public listing developments told BusinessToday that OYO's 1.2 billion IPO is scheduled to happen early next year.

The company was expected to list on the stock exchanges this year, but is now likely only next year as the regulatory process is still underway, BT learned from multiple sources.

The IPO has a $10-12 billion valuation for the IPO as opposed to $9.6 billion during the last fundraise in September this year when tech giant Microsoft put in $5 million in the startup.

A pre-IPO placement round of nearly $200 million is on the table with regulatory approvals awaited, sources said.

OYO did not make any comments on our questions.

In October this year, India's market regulators Securities and Exchange Board of India or SEBI is yet to issue approvals to the IPO in response to OYO's Draft Red Herring Prospectus or DRHP. The company plans to raise Rs 8,430 cr or $1.2 billion through the public listing.

The issuance of up to Rs is part of the offer. An offer for sale aggregating up to Rs 1,430 cr or $197 million is being offered for 7,000 cr or $966 million.

The company said in its filing that the Adjusted Gross Profit Margin was up from 9.7 per cent in FY 20 to 33.2 per cent in FY 21 despite the onslaught of COVID 19 in the hospitality sector.

OYO plans to use net proceeds from Fresh Issue Prepayment or repayment of certain borrowings, including certain subsidiaries, to fund organic and inorganic growth initiatives and general corporate purposes.

The hospitality chain is involved in a legal tussle with a smaller rival, Zostel, which approached SEBI seeking the suspension of OYO's IPO on account of inadequate disclosures in its DRHP. The Federation of Hotels and Restaurant Association of India or FHRAI has sought SEBI's intervention.