In 2021, Oyo made its initial move towards an Initial Public Offering (IPO), aiming for an impressive valuation of $12 billion. Fast forward to March 2023, the company reignited its IPO ambitions by submitting confidential documents to SEBI, the market regulator. However, plans were once again postponed in May 2024. Recent reports indicate that Oyo is eyeing a potential market debut as soon as March, with a target valuation of over $7 billion.
The Importance of SoftBank’s Backing
Without the support of SoftBank, Oyo could encounter significant challenges in obtaining board approval and attracting investors for its IPO. The founder, Ritesh Agarwal, who is just 31 years old, has been advocating for a swift IPO to fulfill obligations linked to a restructured $2.2 billion loan he secured in 2019. This loan, which was personally backed by SoftBank’s CEO Masayoshi Son, carries a payment deadline for the initial installment in December. There are indications from lenders that they might extend the repayment schedule, provided Oyo successfully lists this year.
Expansion into Food and Beverage
In an exciting development, Oyo has announced its plans to venture into the food and beverage sector by launching in-house kitchens and Quick Service Restaurant (QSR) carts at its hotels. This initiative, branded as Townhouse Cafe, will initially target about 1,500 company-serviced hotels under the Townhouse by OYO label during the first phase, expected to roll out in FY2025-26.
- This move is a direct response to customer feedback indicating a demand for in-room dining options.
- The company anticipates that this culinary initiative will significantly enhance customer satisfaction levels.
By diversifying its services and pushing forward with its IPO plans, Oyo is positioning itself strategically in a competitive market. This two-pronged approach not only aims to bolster its financial standing but also to enrich the overall guest experience.
