Ritesh Agarwal-led OYO files preliminary papers for its $1.2 billion IPO

• OYO IPO would consist of 83% fresh issue and 17% secondary issue.
• SoftBank would be selling shares aggregating up to $178 million in the public issue.
• The company will spend the proceeds from the IPO for repaying of loans and funding organic as well inorganic growth initiatives.

SoftBank-backed hotel and hospitality giant OYO has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), to raise ₹8,430 crore or about $1.2 billion via its initial public offering (IPO).

According to documents seen by Business Insider, the Gurugram-based startup aims to raise ₹7,000 crore or about $942 million through the sale of new shares. About ₹1430 or $192 million will be raised through secondary issue or offer for sale.

The IPO would consist of 83% fresh issue and 17% secondary issue.

Investors	Offer for Sale (OfS)
SoftBank via SVF India Holding (Cayman)	Shares worth ₹1,328.53 crore ($178 million)
Grab’s A1 Holdings	Shares worth ₹51.6 crore ($7 million)
Huazhu Hotels Group’s China Lodging Holdings (HK)	Shares worth ₹23.1 crore ($3 million)
Global Ivy Ventures	Shares worth ₹26.7 crore ($3.6 million)

OYO’s DRHP is not public yet.

According to OYO's DRHP accesssed by Business Insider, OYO is planning to use the proceeds from the public issue to repay loans worth ₹2,441 crore. The company would also spend about ₹2,900 crore in organic and inorganic growth initiatives.

Kotak Investment Banking, JP Morgan, Citigroup Global Markets India are the global coordinators and book running lead managers of the IPO. ICICI Securities, Nomura, Deutsche Equities India and JM Financial are booking running lead managers. Link Intime is the registrar of the office.

OYO was founded in 2013 by Ritesh Agarwal, who is the $4 self-made billionaire in the world after American model and entrepreneur Kylie Jenner. The Gurugram-based company has a network of over 157,000 small hotels and home owners spread across 35 countries.

The company reported a revenue of ₹4,157 crore in the financial year 2021, this represented a significant drop from ₹13,412.2 crore reported by the company in the last financial year. This drop seems to be due to COVID-induced travel restrictions that impacted the entire growth and hospitality segment.

However, it improved its adjusted gross margin from 9.7% in FY20 to 33.2% in FY21. The company’s EBITDA losses also dropped during the pandemic.

Metrics	FY2021	FY2020	FY2019
Revenue	₹4,157 crore	₹13,413 crore	₹6,518 crore
Restated loss for the year	₹3,944 crore	₹13,123 crore	₹2,364 crore

According to media reports, the company is seeking over $12 billion in valuation with this public issue.

The company, which is backed by Airbnb, Lightspeed Venture Partner and Sequoia Capital India — was valued at$4, when it raised $5 million from Microsoft.

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