OYO takes first step towards a $1.2 billion IPO, reportedly appoints 3 investment banks

• OYO is reportedly looking to raise $1.2 billion via an IPO
• The company plans to list in India, as per a media report.
• It is reportedly in talks with Microsoft for an investment, at a valuation of $9 billion.

Hotel and hospitality firm OYO has reportedly shortlisted investment banks JP Morgan, Kotak Mahindra Capital and Citi for its $1.2 billion initial public offering (IPO). The eight-year-old startup is expected to add more bankers as the IPO process matures.

The development was reported by Moneycontrol citing industry sources, who also highlighted that the company is leaning towards listing in India. OYO hasn’t made any such announcements officially.

Business Insider has reached out to OYO seeking comments on the media report.

OYO’s IPO is likely to be a mix of primary and secondary shares, giving partial exit to a few of its investors. SoftBank, Sequoia Capital, Lightspeed India, airbnb, Didi Chuxing and Grab are a few of the investors in OYO.

The report comes only two weeks after media reports highlighted that global tech giant Microsoft is looking to invest in OYO, at a $9 billion valuation.The company has raised about $4 billion to date.

Last month, the company raised $660 million in debt from undisclosed institutional investors. The company had also highlighted that the debt financing offer was oversubscribed by 1.7 times and the company has received a commitment for another $1 billion from such leading investors.

OYO was launched by Ritesh Agarwal in 2013. The company currently has a network of 100,000 small hotels and home owners spread across 800 cities in 80 countries. The year 2020 was pretty bad for the hotels and hospitality giant, which suddenly found itself in the middle of a massive capital crunch.

The world has stepped inside due to COVID-induced lockdowns and travel restrictions, leading to a 50% to 60% drop in OYO’s revenue and occupancy. Agarwal had come on record to confirm this.

However, chief executive of SoftBank Investment Advisers, Rajeev Misra, in September 2020, highlighted that OYO’s revenue was at about 30% of its pre-COVID levels.

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