Oyo withdraws IPO filing, plans to refile after refinancing $450 million loan

Oravel Stays Ltd, the parent company of travel and hospitality firm Oyo, has withdrawn its draft red herring prospectus or DRHP, for the second time.

The company plans to refile the DRHP after refinancing its 450 million dollars loan. As per PTI, JP Morgan is expected to be the lead banker for the refinancing, with an estimated interest rate of 9 to 10 percent per annum.

The IPO-bound firm, backed by Softbank had initially filed paperwork with SEBI in 2021 for a public listing but withdrew it and refiled in 2023.

"The refinancing is expected to result in annual interest savings of USD 8-10 million (Rs 66.4-83 crore) in the first year, after accounting for the costs associated with the bond issuance. The company anticipates annual savings of USD 15-17 million (Rs 124.5 -141.1 crore) thereafter, almost all of which would get added to its net profits. Post the debt refinancing, the company is open to contemplating an equity round, to reaffirm investor confidence before a public listing to fortify its financial strength," the source said.

The IPO was then delayed due to volatile market conditions, leading the company to prepare for a lower valuation of around 4-6 billion dollars, down from the initial target of 11 billion dollars.