Hospitality and travel-tech firm is looking to launch its initial public offer after September, and has written to stock market regulator Sebi to file updated and consolidated financial information.
According to people in the know of the development, the company, which had filed preliminary papers with Sebi to raise 8,430 crore through an initial share sale in October last year, is now prepared to settle for a lower valuation of around USD 7 -- 8 billion against the USD 11 billion it was targeting initially.
OYO's move to launch the IPO after the September quarter is driven by the expectation of improvement in its financial performance and the current volatile nature of the market, they said.
It is believed that a letter to Sebi, Oravel Stays Ltd, which runs OYO, has asked permission to include restated financial statements for the six month periods ending September 30, 2022, September 30, 2021, and September 30, 2020.
The public is concerned about price swings in a newly listed stock. It is best to show to investors that the business revival is real, it is strong and is leading to higher bookings and perhaps, the first sign of a positive bottom line. A person aware of the plans of the company said the company's plans will likely wait for a quarter.
When reached out for comments, I didn't want to comment.
As per the company's DRHP draft red herring prospectus OYO had incurred a Rs 1,744. In FY21, a loss of 7 crore was made.
The company's proposed IPO consisted of a fresh issue of equity shares aggregating up to 7,000 crore and an offer for sale to the tune of 1,430 crore, as per its DRHP.
However, it has been reported that OYO wants to go ahead only with the Rs 7,000 crore primary issue, do away with the Rs 1,430 crore offer for sale OFS component, and has reached out to Sebi for approval. An OFS allows the promoters of a company to sell their shares to the public through the stock exchange.
OYO's OFS would have seen its largest investor, Softbank Group, selling around 2 per cent of its stake, and other investors Grab Holdings, Huazhu Hotels and the family office of Sunil Munjal of the Hero Group diluting their stakes as well.
A source said that when OYO goes for listing in the markets, it will settle for a more reasonable valuation of around USD 7 -- 8 billion, less than the USD 11 billion it was targeting initially, considering how the stock has changed in the past few months.
When the company filed its DRHP with Sebi in October 2021, the company was buoyant and getting high valuations and oversubscription with both global and domestic capital flowing into the stock market.
Since then, the scenario has changed with rising inflation and interest rate hike cycle.