Oyo Hotels postpones IPO for third time

Indian hospitality chain Oyo Hotels has postponed its initial public offering (IPO) for the third time, following opposition from its stakeholder SoftBank Group and amid volatile stock market conditions, as reported by Bloomberg.

This marks the company's third attempt at going public since 2021, now potentially looking to debut as early as March with a targeted valuation upwards of $7bn.

SoftBank, which holds a significant stake in Oyo that surpasses founder Ritesh Agarwal's more than 30% share, has urged the company to delay the IPO until its earnings improve.

The support of the fund is crucial for board approval and to attract investors, as it has been advised not to sell into the IPO.

The company is closely monitoring its performance and the broader economic environment to determine the most opportune time for its IPO, according to an Oyo spokesperson.

Meanwhile, SoftBank has refrained from commenting on the matter.

Agarwal has been keen on a swift IPO to fulfill the terms linked to his restructured $2.2bn loan, which was personally guaranteed by SoftBank founder Masayoshi Son.

The loan's first instalment was due in December, but lenders may extend the repayment date if Oyo lists this year.

Despite the delay, SoftBank may assist in extending the deadline for Agarwal's loan repayment.

The Oyo spokesperson clarified that the founder's financial arrangements are separate from the company and will not influence the IPO schedule.

The final decision on the listing will be made by the board, considering the interests of all shareholders.

SoftBank's role is complicated due to Son's personal involvement in Agarwal's finances, which enabled the Oyo founder to secure a multi-billion-dollar loan to increase his stake in the company.

This loan restructure took place in 2022, with the first payment of $383m still pending.

Oyo, which achieved its first annual net profit in the year ended March 2024, is projecting a significant increase in profits to Rs6.2bn ($74m) in the subsequent year.

Once one of India's most valuable startups, Oyo's valuation has been impacted by intense competition, although it has returned to profitability.

In 2022, the Vision Fund reduced Oyo's valuation on its books to $2.7bn from $3.4bn.

In a recent development, Oyo announced the upcoming launch of a dedicated app for its premium and mid-market to premium company-serviced hotels in April 2025.

"Oyo Hotels postpones IPO for third time" was originally created and published by Hotel Management Network, a GlobalData owned brand.