SoftBank-backed Indian start-up Oyo files for $1.2 billion IPO

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  • Indian hotel chain Oyo is planning to raise around Rs 84.3 billion ($1.16 billion) in an initial public offering, according to draft papers submitted to the country’s market regulator.
  • OYO plans to issue fresh shares worth up to Rs 70 billion while existing shareholders can sell shares worth up to Rs 14.3 billion.
  • Backers of the start-up include SoftBank Vision Fund, Lightspeed Venture Partners and Sequoia Capital India.

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Indian hotel chain Oyo is planning to raise around Rs 84.3 billion ($1.16 billion) in an initial public offering, according to draft papers submitted to the country’s market regulator.

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OYO plans to issue fresh shares worth up to Rs 70 billion while existing shareholders can sell shares worth up to Rs 14.3 billion. Some of the major backers of the start-up include SoftBank Vision Fund, Lightspeed Venture Partners and Sequoia Capital India.

The start-up said it would also consider issuing shares worth up to 14 billion rupees ($193 million) in a pre-IPO placement.

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The Gurugram-headquartered firm said it will use the proceeds from the IPO to pay off existing obligations and fund growth, which may include mergers and acquisitions.

OYO’s technology allows hoteliers to accept online bookings and payments through its platform, among other services. The start-up has spread beyond India and into the US, Europe and Southeast Asia. It considers India, Indonesia, Malaysia and Europe as its major growth markets.

Last year, a New York Times report cast doubt on the financial health of Indian start-ups, highlighting questionable tactics employed in the pursuit of growth.

The coronavirus pandemic has hit the hospitality sector and Indian hotel chains retrenchment of employees To cut costs and losses.

The start-up is also the latest among many highly valued Indian tech start-ups to enter the public market.

Food delivery firm Zomato made its market debut in July. Payments giant Paytm has filed a $2.2 billion IPO. Ride-hailing firm Ola is planning to raise up to $1 billion when it goes public. Walmart-owned e-commerce company Flipkart is also reportedly considering a public listing.

CNBC’s Naman Tandon

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