OYO to shelve IPO plans in 2022

Hospitality startup Oravel Travels, which operates the OYO brand, has postponed its IPO plans to well beyond September 2022.

Oravel Stays Ltd., the hospitality and travel unicorn was founded by Ritesh Agarwal in 2013 and operated in Gurugram. In 2013, the company received Series-A funding and launched the OYO app. In 2015, the company expanded throughout India and made its place in 100 cities. In 2016, the company expanded to Malaysia, its first international destination. Following this, the company expanded throughout Asia, the UK, China, and Indonesia in 2018 & the US, the Middle East, and Europe in 2019. The app surpassed 100 million downloads in 2021.

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The Softbank-backed company filed its preliminary IPO documents in October last year and has sought regulatory permission to update its draft prospectus with fresh financial information. The company had sought a valuation of $11 billion in its draft prospectus, but, according to sources, is willing to settle for $7-8 billion in the future.

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According to experts, the current market conditions are not favorable for raising funds through an IPO. The geopolitical disturbance on account of the Russia-Ukraine war alongside rising inflation has forced investors to reduce their risk appetite and withdraw their investment from any risky investments. The Nifty 50 index breached 16,000 in early March as the price swings have been large.

Moreover, the conditions are worse for tech companies. The tech-heavy index Nasdaq has tumbled 26% this year. The Nifty IT index, which was over 30,000 at the beginning of 2022, has fallen to 27,500, down almost 30%. Furthermore, new stocks are witnessing price swings which could turn investor sentiment away from IPOs. LIC and Rainbow Childrens Medicare are examples of the same.

If the hotel unicorn is allowed to rectify its papers, the company would add more information and include the financials for the fiscal year ended in March, giving a better representation of the company's business since travel as a business has resumed.

Article by Aman Agarwal.

This news piece is brought to you in association with jobaaj.com


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