Oyo likely to file DRHP in November, targets $7-8 bn IPO valuation

Global travel tech firm Oyo plans to file its Draft Red Herring Prospectus (DRHP) in November, eyeing a $7-8 billion valuation for its IPO, sources said.

The company is expected to approach its board with the proposal next week, people familiar with the matter told PTI.

When reached out, a company spokesperson said, "While we cannot comment on any timelines related to Oyo's DRHP or IPO related plans, since it's a decision that will be guided by Oyo's Board of Directors and will be solely at their discretion. For now, Oyo continues to evaluate a range of strategic options to drive value for its stakeholders".

According to sources, discussions with key banking partners have ramped up in recent weeks, with valuation guidance now pegged at $7-8 billion ( around Rs 70 per share), potentially in the range of 25-30 times the EBITDA. 

"The filing with regulators is being considered for November. Over the past few months, SoftBank has engaged with banks such as Axis, Citi, Goldman Sachs, ICICI, JM Financial, and Jefferies in London to assess market sentiment. After assessing market feedback, they are now confident in their decision. The board will be approached next week as the company firms up the details and finalises key strategic elements," said one person aware of the developments.

SoftBank remains one of Oyo's largest shareholders. Insiders indicate that the prospective filing will showcase Oyo's latest Q1 financial performance, capitalising on a period of strong growth and improved fundamentals.

This has also been a double-digit growth quarter for the hospitality industry with strong tailwinds.

Oyo is working on the rollout of a new parent brand identity that will unify its expanding portfolio.

Earlier this year, Oyo founder and CEO Ritesh Agarwal sought name suggestions for its parent entity Oravel Stays Limited via his social media platforms. 

The name chosen through the exercise may end up being the new name of the group.

Oyo is also actively exploring launching a separate app for its premium hotels and mid-market to premium company-serviced hotels, as the segment has seen exponential growth across India as well as its global markets.