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Exclusive | SoftBank-backed Oyo picks I-Banks JP Morgan, Kotak Mahindra Cap and Citi for over $1-billion IPO

Oyo platform hosts 100K+ small hotels and homeowners across 800 cities in 80 countries, including India, the US, UK, Europe, Southeast Asia, and the Middle East. The firm recently closed a debt financing round of $660 million and is now in advanced talks with Microsoft for a fresh investment valuing it at $9 billion

August 09, 2021 / 01:18 PM IST

SoftBank-backed hospitality unicorn Oyo Hotels & Rooms has shortlisted investment banks JP Morgan, Kotak Mahindra Capital and Citi for a big-bang initial public offer ( IPO) to raise in excess of a billion dollars, multiple industry sources with knowledge of the matter told Moneycontrol.

The moves comes on the back of expectations of a post-pandemic travel surge and global tech giant Microsoft eyeing an investment in the Gurgaon-based firm valuing it at $9 billion, a story reported on this portal on June 29, 2021.

“These 3 i-banks have been taken on board recently and work has begun on the issue. The firm is leaning towards a domestic IPO but has kept alternate options open. More i-banks may be added later,” said one of the persons cited above.

A second person said the penetration of Oyo is more than several other start-up brands and the IPO will help to strengthen the firms' balance sheet. "The plan is to raise in excess of $1.2 billion dollars, though the size hasn’t been finalised and may vary at a later stage.”

A third person said the proposed IPO is likely to be a combination of chiefly primary issuance of shares along with a secondary component. "The listing will also help to facilitate a partial exit, if required, for some of Oyo’s investors,” this person told Moneycontrol.


“Oyo is an asset-light, tech-centric platform and due to its tie-ups with hotels, it can scale up very quickly,” said a fourth individual familiar with the firm’s listing plans.

The Ritesh Agarwal-founded firm counts SoftBank, Sequoia Capital, Lightspeed India, Airbnb, Chinese ride-hailing giant Didi Chuxing and ride-hailing firm Grab as it’s investors.

All the four individuals above spoke to Moneycontrol on the condition of anonymity.

Moneycontrol is awaiting an email response from Oyo, Kotak Mahindra Capital and Citi and will update this article as soon as we hear from these firms. JP Morgan declined to comment.

On July 16, Oyo, whose business was seriously hit at the peak of the pandemic, closed a debt financing round of $660 million from global institutional investors with an aim to retire some of its existing debt and pump up its operations and product technology. Later, in interaction with Moneycontrol on July 17, group Chief Financial Officer (CFO) Abhishek Gupta said that the company was working on the readiness for an IPO.

"As you know, there's a lot of nuts and bolts and background work that needs to be done. Our audit committee and board has asked us to be ready for the public market event by the end of this year and after that it will be a combination of looking at the overall COVID recovery, the market appetite, market readiness as well as our internal readiness. We have not put a time or date," Gupta said.


Launched in 2013, OYO is a leading technology and revenue growth platform for 100K+ small hotels and homeowners across 800 cities in 80 countries, including India, the US, UK, Europe, Southeast Asia, and the Middle East.

It is a global platform for entrepreneurs and small businesses with hotels and homes which provides full-stack technology, which according to the company, increases earnings and eases operations and also delivers affordable accommodation that guests can book instantly.

OYO has a suite of technology products for its partners in India and across the world which include Co OYO, OYO OS, OYO YO!, OYO Tariff Manager, OYO Secure, OYO Wizard, and the consumer-facing OYO App, among others.

In Q4 last year, OYO’s app in travel was globally the third most downloaded app worldwide as per App Annie, at 91 million+ downloads, according to the firm.

In an interview to Reuters on July 12, 2021, Agarwal said the firm had about $800 million in reserve which was being managed with a future IPO in mind.

According to reports, in an email to employees in March, OYO’s founder and group CEO Ritesh Agarwal said that the India business had become EBITDA positive and the company was earning the same gross profits globally in dollars since January 2021 as it did in the pre-COVID period.

"We expect gross profits to get stronger in 2021 as restrictions and lockdowns ease as well as vaccination coverage increases," Agarwal said. India is the second market, after OYO Europe Homes, that has achieved profitability and with these two largest markets financially sustainable, they are clear examples of the success of our business model at scale, he had added.
Ashwin Mohan
first published: Aug 9, 2021 12:42 pm

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