Oyo is looking to raise around Rs 7,000 crore ($950 million) through fresh issuance of shares while the rest of it would be through secondary share sale (offer for sale or OFS). In an offer for sale, existing investors sell their stake, in part or full.
The net proceeds from the issue will be utilised to finance prepayment or repayment of borrowings made by Oyo’s subsidiaries. This is to the tune of around Rs 2,441 crore while it will also use Rs 2,900 crore for funding its organic and inorganic growth initiatives. The rest of the IPO proceeds will be for general corporate purposes.
With this, Oyo joins some of the other top-tier Indian startups like Paytm, PolicyBazaar, Nykaa and others which have filed for IPOs over the past few months.
Online food delivery firm
Zomato, in July, made a stellar debut on the bourses here setting the stage for domestic startups to ride on the current IPO wave.
The IPO filing by Oyo comes at a time when it is embroiled in a years-long legal battle with Zostel (Zo Rooms) which was once its rival.
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Zostel is expecting an interim stay from the Delhi High Court to restrict the SoftBank-backed company from modifying its cap table, including by way of an IPO. The dispute, which dates back to 2016,
will be heard next on October 7 as reported by ET.
ET was the first to report that
Oyo is looking at a valuation of over $12 billion via its IPO. However, Oyo hasn’t mentioned its expected share pricing in the DRHP. Oyo was last valued at $9.6 billion after
raising around $5 million in strategic investment from Microsoft.
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