By Abhay Ray 
Introduction
The world leader in hospitality, Oyo, is getting ready to submit its Draft Red Herring Prospectus (DRHP) by the end of QI FY25 and is resurrecting its IPO prospects. After two unsuccessful bids, this is the company’s third attempt to go public. Oyo is positioned to obtain a consolidated ownership structure as a result of founder Ritesh Agarwal’s shareholding restructuring, which is linked to the upcoming IPO.
The Restructuring Strategy of Oyo
According to sources, Oyo’s ownership structure has changed as a result of the IPO, with founder Ritesh Agarwal making changes and early investors like Lightspeed Venture Partners anticipated to sell off their shares. Media sources from the previous week stated that Peak XV Partners had already sold shares valued at $80-90 million, while early investors, Lightspeed Venture Partners and others, are seeking to sell their shares in the Gurgaon-based company. Ritesh Agarwal has entered into debt finance agreements that include the IPO plans in order to execute a public offering this year. Media reports emphasised that Oyo’s goal is to file well before the conclusion of the first quarter. . New investors, primarily family offices, are interested in the IPO, aiming to invest now and benefit from the public offering. Founder Agarwal, SoftBank Group, and HNI family offices are expected to maintain key positions in the company’s ownership structure. Agarwal and SoftBank together own over 75% of Oyo parent Oravel Stays. In order to invest now and benefit from an IPO, the new investors—mostly family offices—are interested in the IPO link. Before the anticipated IPO filing, three significant shareholder groups—founder Agarwal, SoftBank Group, and HNI family offices—are anticipated to possess a significant portion of the company’s capital table, indicating a concentrated ownership structure.
Recent Oyo Developments
Timeline :-
16-Jan-2025 – Oyo investors plan to sell stake at $3.9b valuation
- Oyo investors explore selling shares at $3.9B valuation
- Peak XV sells stake, earning up to $90M in profit
05-Jan-2025 – Oyo nets $64.1m in funding led by Redsprig Innovation Partners
- Oyo raises ₹550 crore for expansion plans
- Recent profits boost market interest and investments
24-Dec-2024 – Oyo acquires Motel 6, Studio 6 brands for $525m
- Oyo acquires G6 Hospitality for $525M.
- 1,500 hotels added to Oyo’s North America portfolio.
18-Nov-2024 – Oyo CEO increases $65m stake
- Agarwal plans to buy shares worth ₹550 crore.
- His stake in Oyo will rise from 30% to 32%.
17-Jun-2024 – Oyo finalizes up to $125m raise at discounted $2.5b valuation: report
- Oyo raises $100M-$125M at $2.5B valuation
- IPO slated within 18-24 months after previous plans failed
30-May-2024 – Oyo records first-ever net profits: founder
- Oyo records first net profit of $12M in FY 24
- Company seeks pre-IPO funding, valued at $2B-$2.3B
Oyo’s Financial Performance and Valuation
Oyo recently reported its first-ever profit of 229 crore rupees (US$26.49 million) for FY24 and 132 crore rupees (US$15.27 million) for Q1 FY25, , a promising sign for its public offering. This improved performance and recent fundraising efforts have contributed to a more positive outlook for the company. Oyo’s valuation has fluctuated, reaching a peak of $9 billion in 2021, but is currently around $4 billion, which reflects a revival in sustainable operations. The company’s latest public offering is likely to be less than $1 billion, and it is expected to command a premium based on the ongoing stake sale conversations at a valuation of nearly $4 billion.
Strategic Moves Driving Growth
The stock market authority rejected Oyo’s initial 2021 attempt to go public in January 2023. Thereafter, the company filed a new application for a smaller IPO but withdrew it in May last year and decided to raise funds privately. SoftBank, Oyo’s biggest investor, had cut its valuation from $3.4 billion to $2.7 billion in 2022. Oyo’s updated confidential filing called for a 40–60% lower initial public offering (IPO), whereas its initial proposal was for a $1.2 billion (INR 8,430 crore) offering. Expansion in India, Southeast Asia, and the U.S., coupled with strategic investments in Europe, has fueled this profitability. A key highlight includes Oyo’s acquisition of G6 Hospitality in the U.S., projected to add over INR 630 crore to its EBITDA in the first year post-integration. Recent private funding rounds, including a INR 1457 crore infusion, have strengthened the company’s cash reserves, enabling aggressive market expansion.
Conclusion
Although details are still being finalized, its latest IPO is likely to be under $1 billion. However, at an evaluation of around $4 billion, it will likely command a higher price for itself in the on-going share sale talks. Meanwhile, Oyo has turned profitable and also puffed up its cash balance with recent fund raising. As part of its long-term strategy, Oyo aims to leverage its presence in global hospitality markets, particularly in high-growth regions like the U.S. and Southeast Asia. The firm is also tapping into the mid-market travel segment, aligning with its vision to become a global leader in budget and mid-scale accommodation.
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