Oyo may reduce IPO size by as much as two-thirds

28 Mar 2023 , 12:12 PM

Oyo, backed by SoftBank is reducing the number of shares it aims to sell via a stock-market debut by about two-thirds, an effort by its founder to get the sale done even after tech valuations plunged.

The company is preparing to refile preliminary IPO papers with the market regulator SEBI as soon as this week. In the filing, Oyo will outline plans to sell just a third of the new shares it originally planned, eroding the amount of fresh capital it is expected to receive, one of the people said.

Oyo which was valued around at $10 billion as India’s Airbnb equivalent is reporting mounting losses even when the travel market has improved from the pandemic-era trough. Agarwal, meanwhile, took on billions of dollars of debt to boost his holding in the firm.

This would be a second attempt of the SoftBank Group Corp.-backed startup to raise funds through IPO. As in earlier try, the stock market regulator has raised multiple red flags in 2021. After that, the valuations of technology companies have declined after accelerating inflation and rising interest rates left customers with less to spend and raised concerns of a potential recession.

Agarwal, his holding company RA Hospitality Holdings and SoftBank Vision Fund remain the company’s three promoters with no change from its 2021 prospectus, according to the reports. He has established Oyo in 2013 after collage dropping. He got the backing of SoftBank’s Son when he was 21 and the Japanese billionaire then took the founder under his wing, mentoring him and, later, providing personal guarantees for his multibillion dollar debt.