OYO eyeing a valuation of $7-8B for its IPO
What's the story
OYO, a global travel tech firm, is gearing up to file its Draft Red Herring Prospectus (DRHP) in November. The company is eyeing an initial public offering (IPO) valuation of $7-8 billion. A board meeting on the proposal is likely next week. SoftBank, one of OYO's biggest shareholders, has been talking to banks about the market sentiment.
Valuation insights
SoftBank consults banks on market sentiment
The valuation guidance for OYO's IPO has been set at $7-8 billion, or roughly ₹70 per share. This could translate into an EBITDA multiple of 25-30 times. Over recent months, SoftBank has consulted with banks including Axis, Citi, Goldman Sachs, ICICI, JM Financial and Jefferies in London to gage market sentiment. Based on this feedback they are now confident about their decision.
Financial outlook
OYO's Q1 financials to be highlighted in upcoming filing
The upcoming filing is expected to highlight OYO's latest Q1 financials, riding on a wave of strong growth and improved fundamentals. The hospitality sector has also witnessed double-digit growth this quarter with strong tailwinds. Earlier this year, Ritesh Agarwal, founder and CEO of OYO, had asked for name suggestions for its parent company Oravel Stays Limited on social media platforms.
Strategic moves
New parent brand identity in the works
OYO is also considering launching a separate app for its premium hotels and mid-market to premium company-serviced hotels. The segment has seen phenomenal growth in India as well as global markets. The company is also working on a new parent brand identity that will bring together its growing portfolio.