Ritesh Agarwal owned OYO, the hospitality and travel-tech company, could finally be moving closer to Dalal Street. As per a PTI report, the OYO is preparing to approach its board next week with a proposal to file its Draft Red Herring Prospectus (DRHP) in November.
Given the valuation buzz, and SoftBank’s involvement, let’s take a look at this upcoming IPO and what makes this one of the most closely tracked IPOs this year –
OYO IPO buzz: Why is DRHP likely in November
According to the PTI report citing people familiar with the matter, OYO has been in the discussions with top global and domestic investment banks over the past few months. PTI reported that SoftBank, its largest backer, has held talks with Axis, Citi, Goldman Sachs, ICICI, JM Financial, and Jefferies in London to gauge investor sentiment.
A spokesperson for the company, when asked about the timeline, told PTI, “While we cannot comment on any timelines related to OYO’s DRHP or IPO related plans, since it’s a decision that will be guided by OYO’s Board of Directors and will be solely at their discretion. For now, OYO continues to evaluate a range of strategic options to drive value for its stakeholders.”
This statement makes it clear that the final word rests with the board, but the groundwork for a November filing seems to be falling into place.
OYO IPO buzz: The $7-8 billion question
One of the most striking elements of the IPO chatter is valuation. As per PTI, OYO is seeking a valuation between $7-8 billion, roughly translating to around Rs 70 per share.
As per the report, this indicates that it would be in the range of 25-30 times its EBITDA.
Another noteworthy point about this upcoming IPO is SoftBank’s involvement. It remains a key factor to watch out for, as the Japanese investor has been closely working with bankers to ensure the valuation is both achievable and market-ready, as per market buzz.
OYO IPO buzz: Riding on industry momentum
The hospitality sector has been on a growth trajectory. The company is benefiting from both domestic tourism and global travel recovery.
As source-base information on PTI, OYO’s Q1 performance has shown improved fundamentals and strong double digit growth, in line with the broader industry tailwinds.
Alongside IPO plans, OYO is also reworking its corporate identity. Earlier this year, founder Ritesh Agarwal sought public suggestions for renaming Oravel Stays Limited, the company’s parent entity.
In addition to this, the company is also planning to launch a separate app to premium and mid-market hotels.