Oyo Hotels has delayed its initial public offering (IPO) plans for the third time amid opposition from its largest shareholder, SoftBank Group Corp., and continued market volatility, Bloomberg News reported on Friday.
The company first filed for the IPO in 2021, seeking a valuation of up to $12 billion.
In March 2023, it renewed its plans by confidentially filing papers with market regulator SEBI, before delaying the issue again in May 2024.
“SoftBank has balked at the proposed timing and pressed Oyo to hold off on an initial public offering until its earnings are stronger,” Bloomberg reported, citing people familiar with the matter.
Now, Oyo may “seek to debut as early as March, targeting a valuation upwards of $7 billion”, the report said.
Without SoftBank’s endorsement, any listing by Oyo would face major hurdles in securing board approval and attracting investors.
Oyo’s founder, 31-year-old Ritesh Agarwal, had been pushing for a quick IPO to meet conditions related to a restructured $2.2 billion loan he secured in 2019 to raise his stake in the company, the report said.
The loan, personally guaranteed by SoftBank founder Masayoshi Son, had a payment deadline for the first instalment in December. Lenders indicated they may extend the repayment timeline if Oyo is listed this year.
“In exchange for pushing back the IPO, SoftBank may help get an extension on Agarwal’s loan,” the Bloomberg report said.
OYO plans to enter food and beverages with in-house kitchens
OYO on Thursday said it plans to enter the food and beverage business with in-house kitchens and Quick Service Restaurant (QSR) carts at its company-serviced hotels.
The QSR initiative, under the brand name ‘Townhouse Cafe’, will focus on the ‘Townhouse by OYO’ branded hotels.
It will cover 1,500 company-serviced hotels during the first phase of the programme in FY2025- 26.
“The F&B initiative is a result of consistent consumer feedback that the hotels should provide in-room dining options as well. The programme is expected to increase customer satisfaction scores,” the company stated.
