Amid tech rout, Oyo mulls reducing IPO size: Report

Softbank-backed hotel aggregator in India, Oyo, is planning to cut down its IPO size by two-thirds, amid the tech headwinds, reported Bloomberg. The company is preparing to file a new IPO offering document, soon this week.

According to the Bloomberg report, the filing will outline plans to sell just a third of the new shares it had planned originally. This, however, will erode the amount of fresh capital it expected to receive.

While the travel market has improved from the pandemic-era fall, Oyo — once valued around $10 billion as India’s Airbnb-equivalent — is still reporting mounting losses. Oyo founder Ritesh Agarwal has took on billions of dollars of debt to boost his holding in the firm.

This is the second attempt at an IPO by SoftBank Group Corp.-backed startup, after India’s stock market regulator raised multiple red flags on its earlier try in late 2021.

As per Bloomberg, the company was targeting a valuation of about $9 billion and updated its IPO documents in early 2022, but SoftBank later that year reduced its estimate for Oyo to $2.7 billion. The IPO valuation will be finalized through a book-building process nearer to the listing but it’s set to be far from what the company originally envisaged.