Oyo's potential IPO has likely run head-on into the collapse of several recent public market debuts in India with a couple of lawsuits potentially figuring into the regulator's delayed decision. Oyo will eventually go public, but that maiden public appearance likely won't resemble the initial vision.
Softbank-backed Oyo’s hoped-for and much-delayed initial public offering in India could be halved in value or even withdrawn, according to a published report.
The India-based budget hotel operator and aggegator filed its IPO paperwork with India regulators in October 2021, proposing a $10 billion to $12 billion valuation, and was looking at a $9 billion valuation three months later in January 2022, but the IPO has been in limbo pending approval by the Securities and Exchange Board of India.
No one is saying the reason for the paperwork approval delay, but Oyo faces lawsuits from Zo Rooms and the Federation of Hotel and Restaurant Associations of India, according to MoneyControl, which are asking the board to turn down Oyo’s IPO.
Since filing the IPO paperwork in October, several IPO debuts in India have been financially disastrous or come under acute pressure.
The Bloomberg story said that Oyo could go public with perhaps a $6 billion valuation or withdraw the initiative for now.
Asked about these prospects, Oyo said: “We request you to refrain from creating any speculation about changes in our IPO plans. We are awaiting regulatory approvals and are keeping a close eye on market developments.”
Oyo announced a series of management changes Thursday.
Rohit Kapoor, who was CEO of India and Southeast Asia, will become Oyo’s global marketing chief April 1.
At the same time, Ankit Tandon will take on additional responsibilities focusing “on Indonesia and the Middle East region as its CEO while retaining his title as global chief business officer.
And Ankit Gupta, the CEO of hotels and homes, will become CEO of India, the company said.
All three will report to founder and CEO Ritesh Agarwal.
Part of the push will be to strengthen the Oyo brand, and to strengthen ties with family and leisure travelers, as well as corporate travelers.
Asia Editor Peden Doma Bhutia contributed to this report.
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Photo credit: An Oyo property in Las Vegas. The company's potential IPO in India has been delayed. Danielle Hyams / Skift