OYO hires investment banks for $ 1.2 billion IPO

SoftBank-backed hotel company OYO Hotels and Homes has hired at least three investment banks to raise $ 1.2 billion through an initial public offering (IPO), two people close to the company told VCCircle. development.

The IPO will be a mix of primary issues and secondary deals in which around 10 investors and SoftBank could partially exit the company, the two said.
While the company has not decided whether it will be publicly traded in India or elsewhere, it has named investment banks JPMorgan, Kotak Mahindra Capital and Citi, the people said on condition of anonymity.

Other banks will join the consortium, added one of the people.

Financial news site Moneycontrol was the first to report the story on Monday.

While JPMorgan and Citi declined to comment, Kotak only responded to questions when the story was released. A spokesperson for OYO Hotels declined to comment.

The startup, which is operated by Oravel Stays Pvt Ltd, is backed by investors such as SoftBank Group Corp, Lightspeed Venture Partners, Hero Enterprises, Sequoia Capital India, AirBnB, Grab Holdings and Artha Venture Services. Hindustan Media Ventures, which is controlled by HT Media Ltd, invested Rs.54 crore in the hotel company in January 2021. HT Media owns Mosaic Media Ventures, which publishes VCCircle and TechCircle.

The development comes shortly after OYO raised $ 660 million in debt from global institutional investors, including Fidelity Investments in July, to settle past debts and invest in products and technology. The company also made headlines for claims worth Rs 160 crore submitted to the National Company Law Appeals Tribunal (NCLAT) by hotel owners in April.

On June 30, Reuters reported that Microsoft Corp β€œis in advanced talks to invest in SoftBank-backed OYO hotels and homes for an undisclosed amount, valuing the hotel company at around $ 9 billion.” OYO and Microsoft declined to comment on the report.

Founded in 2013, OYO works with more than 100,000 small hotels and owners in 80 countries including India, United States, United Kingdom, Europe, South East Asia and the Middle East . The company laid off nearly 300 employees in 2020 due to the impact of the pandemic on the travel and hospitality sectors.

The travel hotel segment is attracting investor interest despite the ongoing pandemic. In recent deals in the space, travel and hotel reservation service provider ixigo raised Rs 270.3 crore (approximately $ 36.5 million) from Singaporean sovereign wealth funds GIC and Info Edge Venture Fund on last month in anticipation of its IPO.