According to media reports, OYO, the hospitality unicorn, is seeking to secure USD 250 million in funding from investors amidst the delay of its initial public offering (IPO). A significant portion of this capital will be allocated to settling its USD 660 million term loan B.
To make the funding round more appealing, OYO plans to offer secondary shares at a reduced price compared to the primary capital raise valuation. While the exact valuation is yet to be determined, discussions with investors suggest a range between USD 3 billion and USD 5 billion. This potential valuation marks a considerable decline from OYO’s peak valuation of USD 10 billion in 2019.
However, OYO spokesperson dismissed the recent rumors, stating that the company is focused on obtaining approval from the Securities and Exchange Board of India (SEBI). Earlier reports revealed OYO’s discussions with Apollo Management to refinance its term loan B, which was taken during the height of the pandemic.
Originally filed in 2021, OYO’s IPO has faced delays due to various reasons. The startup had pre-filed its draft documents confidentially, reducing the IPO size to USD 400 to 600 million.
In FY23, OYO’s operating revenue rose by 14 per cent year-on-year, reaching Rs 5,463 crore, while its losses decreased by 38 per cent to Rs 1,286 crore.
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