Oyo pre-files IPO draft with SEBI, reportedly cuts issue size to $600 million

After a year when big ticket IPOs such as Zomato and Paytm failed to live up to expectations, most startups were spooked away from stock market debuts and pushed off plans. Apart from boAt and Fab India, which postponed initial share sales in FY23, hotel chain Oyo's listing was delayed after SEBI sent back its draft prospectus for updates.

Towards the end of the financial year, Oyo has pre-filed a Draft Red Herring Prospectus with the Securities and Exchange Board, taking a confidential route for its IPO.

Stock market debut scaled down?

Although the filing at the initial stage is only available to the regulator under pre-filing introduced last year, Oyo has reportedly decreased its target to $400-$600 million.

This will be almost 50 per cent less than the original $1 billion issue planned by Oyo and can be changed by the time an updated DHRP is out.

Although the draft won't be available to the public under pre-filing, its details can be revealed to qualified institutional buyers for marketing purposes.

Festive listing via route preferred by top startups

Although a firm gets 18 months to conduct the IPO after SEBI's approval under pre-filing instead of 12 months, Oyo is expected to go public by Diwali this year.

The firm's aim behind the fundraiser is to pay off its entire debt, while it has a cash balance of Rs 2,700 crore.

Oyo is also expected to report a 19 per cent surge in revenue for FY23.

The confidential route taken by Oyo has also been preferred by Tata Play in India, and global giants such as Lyft, Airbnb and Spotify.