India: Softbank-backed hospitality chain OYO is said to have confidentially submitted a “pre-filing” document for its long-anticipated initial public offering [IPO], a source from the company told Reuters.
The company, which is known officially as Oravel Stays, filed to go public as far back as October 2021 but the IPO has gone through a series of delays since then, including in January when the national Indian capital markets regulator, the Securities and Exchange Board of India [Sebi], asked OYO’s parent company to refile its draft IPO papers with certain updates.
At the start of this month, OYO also underwent a significant reshuffle of its senior management team in preparation for the IPO.
Among the changes were OYO global COO Abhinav Sinha taking up the combined role of chief product and technology officer and the upcoming scheduled departure of CTO Ankit Mathuria in June, while Mandar Vaidya, CEO of OYO Europe and OYO Vacation Homes, will take up an additional role in leading the company’s premium hotel asset portfolio.
The confidential pre-filing option was only brought in by Sebi last year to give companies more flexibility over the size of their share issue and the timing of a potential IPO.
According to the Reuters report, OYO plans to list later in the year, closer to the Indian holy festival of Diwali, for a figure between $400 million and $600 million. The final figure is currently unclear but Bloomberg indicated that OYO may be reducing its IPO size by as much as two-thirds due to the volatility of market conditions and the disappointing performance of a number of recent public market debuts in India.
Valued most recently at $9 billion, OYO submitted fresh financial documents in September, 12 months after the company first filed to go public in 2021 with a draft red herring prospectus for a $1.1 billion IPO. Last year, the startup received regulatory approval to submit additional documents in order to go public.
The tumultuous period for OYO continues after the startup announced in January that it would lay off around 600 employees across its product and engineering teams, affecting close to ten per cent of the company’s 3700-strong employee base worldwide.
OYO confirmed that while it was planning to shut down some projects and merge teams, it would hire around 250 new staff members in its sales and relationship management teams to improve the relationships with its consumers and partners. The chain is also looking to recruit more employees who will help it to grow the number of vacation homes and hotels on its platform.