Oravel Stays Ltd, which operates hospitality unicorn OYO, has written to stock market regulator Securities and Exchange Board of India (Sebi) to revise its financials as it looks to delay its initial public offering (IPO) beyond September further lowering the valuation, two persons aware of the development told VCCircle.
Amid weaker market conditions, OYO is looking at an IPO after September at a lower valuation of around $7-8 billion versus the earlier planned figure of $11 billion, one of the persons added.
A Bloomberg report said the IPO could also be postponed to FY23.
While the company did not comment on the delay, a source said, "The intent behind such a move is to show path to the profitability before going to the listing. Although the pandemic has severely affected many sectors, we have survived the travel and tourism sector. We have logged more than eight lakh bookings primarily through our app and website over the April 11-17 period.
The SoftBank-backed and Ritesh Agarwal-led firm, which is a unicorn (valuation of $1 billion or more), has also sought permission to include restated financial statements for the six-months ending September for fiscal years 2022, 2021 and 2020, the Press Trust of India, which first reported the development, said earlier in the day.
OYO Rooms reported a 54% year-on-year decline in revenue for fiscal 2020-21 to Rs 89 crore. The company reported a net loss of Rs 241 crore during the fiscal, lower than Rs 326 crore in FY20.
This development comes shortly after the SoftBank-backed unicorn’s plan to drop the offer for sale (OFS) in the IPO. VCCircle had reported that OYO may trim its IPO size after investors dropped plans to sell their holdings through an OFS.
The Gurugram-based company had filed papers for a Rs 8,430 crore ($11 billion) IPO in October last year. The proposed IPO comprised a primary capital raise of around Rs 7,000 crore and with other investors selling Rs 1,430 crore worth of shares, VCCircle reported.
Earlier this month, OYO acquired Direct Booker for $5.5 million (around Rs 40 crore) to strengthen its presence in Europe.
VCCircle exclusively reported that last year the company hired at least three merchant banks to raise $1.2 billion through an IPO, two people close to the development said.