When is the OYO IPO planned to hit the Indian market?

Oyo, room and stay start-up has already filed its IPO in the previous year. However, Oyo is not considering either to slash the size of its IPO or to scrap the IPO plans altogether due to the negative sentiments surrounding digital stocks. In the last few months, stocks like Paytm, CarTrade, Nykaa and Zomato have corrected rather sharply. This has forced the company to do a rethink on the entire idea of the IPO and its size.

There are 3 options that Oyo is looking at. The first option is to reduce the size of the proposed IPO from $1 billion that it was originally targeting. The second option is to look at a valuation much lower than the $12 billion it was targeting at the time of the IPO. It could even do a combination of reduction in valuation and reduction in IPO size. However, if the outcome is still not satisfactory, Oyo may plan to suspend the IPO for now.

In an earlier discussion with its investment bankers, Oyo had agreed to lower its proposed valuation of the IPO from $12 billion to $9 billion in the aftermath of the massive sell-off in the digital stocks. However, that was before the Ukraine conflict. The conflict in the Caucuses has raised another major risk factor for Oyo which could result in weak FPI sentiments surrounding digital IPO in particular and emerging markets in general.

It may be recollected that OYO, which is backed by Softbank, Sequoia and Airbnb, had made the preliminary filings in September last year. However, after nearly 6 months, the company is still awaiting the SEBI approval. It is only after the SEBI go ahead that it can plan finer aspects of the IPO like the size of the IPO, the valuations, the marketing strategy, the price band for the IPO etc.

The caution of Oyo is symptomatic of the larger concern that many start-ups are having about going ahead with their proposed IPOs. A number of digital IPOs have got approval but are biding time before they can roll out actual IPO plans. This includes names like the Delhivery Ltd and PharmEasy. Both are in the range of $1 billion and both the issues are already approved by SEBI. However, the final word on the IPO is still awaited.