Oyo Hotels and Homes is planning to raise $1 billion through an initial public offering (IPO). The budget hospitality start-up is planning to file the draft red herring prospectus (DHRP) — the preliminary registration document prepared by merchant bankers for prospective IPO — with market regulator Sebi next week.

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The proposed Oyo IPO will comprise a fresh issue of shares and an offer for sale from existing shareholders. Oyo has appointed Kotak Mahindra Capital, JP Morgan and Citigroup to manage the issue, according to a report in Economic Times.

The report also added that the bankers are awaiting a final nod from the company.

After Zomato, CarTrade, Paytm, PolicyBazaar, Nykaa, and Mobikwik, Oyo would be the seventh Indian tech unicorn to roll out an IPO. While Zomato and CarTrade have already rolled out their IPOs, the others have filed papers with Sebi.

Earlier this month, Oravel Stays, the parent company of hospitality firm Oyo, approved the conversion of the company from a private limited to a public limited. In its filing, Oyo said that in order to undertake an IPO, "the status of the company is required to be changed from a private company limited by shares to a public company limited by shares".

The seven-year-old startup, founded by 27-year-old Ritesh Agarwal, had recently raised about $5 million in a strategic investment from Microsoft. The company — backed by Soft Bank, AirBnB, and Grab — also increased its authorised share capital to Rs 901 crore early from Rs 1.17 crore.

Like other hospitality firms, Oyo, which operates in 35 countries, was also hit hard by the COVID-19 pandemic but is now recovering fast.

First Published:Sept 23, 2021 9:51 AM IST