AUGUST 20218B U D D I NG B I Z ZOYO HOTELS PLANNING TO GO PUBLIC BY YEAR ENDOyo Hotels and Homes will soon join the list of startups in the country launching an initial public offering (IPO). According to sources, which cited people familiar with the development, the company has set a September deadline for filing its IPO prospectus and hopes to become a public company before the end of the calendar year.According to the sources, Oyo has begun discussions with a number of bankers, including JP Morgan, Citi, and Kotak Mahindra Capital, to manage its public offering."Work has begun and some bankers have been finalised," a person aware of the matter told. "They are aiming to file the draft red herring prospectus (DRHP) by September."Another person said, "Directionally, they are moving towards an IPO but many details are yet to be finalised, including the offer size."During the global health crisis, the hotel aggregator, in which SoftBank owns a 46 percent stake and is one of its biggest bets, has endured months of layoffs, cost cuts, and losses. However, with the relaxation of travel restrictions and the expansion of vaccinations, travel demand in India is gradually increasing.As the number of Covid-19 cases falls and vaccination rates improve, Oyo is seeing a revival in business in markets such as India and Europe. Oyo told that stronger recovery was being seen in Europe due to higher vaccination rates, and that India would follow suit once more people were vaccinated at least once.Currently, India and Southeast Asia account for 43 percent of Oyo's revenue, with Europe accounting for 28 percent and the rest coming from other global markets. As a result of the virus outbreak, the company was forced to reduce its operations in markets such as the United States and China. In India, it laid off a significant portion of its workforce as Covid-19 wreaked havoc on its operations.Its IPO plans come at a time when the Indian public market appears to be bullish on startup IPOs in the aftermath of Zomato's IPO. After filing their DRHPs in recent months, Mobikwik, Nykaa, Paytm, Policybazaar, and Car-Trade are all in various stages of going public in India.Last month Oyo had obtained $660 million in debt financing from global institutional investors to service its existing loans. Wall Street firms such as Fidelity, Citadel Capital Management, and Varde Partners have invested in Oyo's TLB, also known as Term B Loan.In addition, the hotel aggregator is in talks with Microsoft about financing. As the number of Covid-19 cases falls and vaccination rates improve, Oyo is seeing a revival in business in markets such as India and Europe
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