Indian start-up Oyo, backed by SoftBank, files $ 1.2 billion IPO

Indian hotel chain Oyo plans to raise around 84.3 billion rupees ($ 1.16 billion) in an initial public offering, according to draft documents submitted to the country’s market regulator.

Oyo plans to issue new shares worth up to Rs 70 billion while existing shareholders could sell shares worth up to Rs 14.3 billion. The startup’s main backers include SoftBank Vision Fund, Lightspeed Venture Partners and Sequoia Capital India.

The start-up said it would also consider issuing shares worth up to 14 billion rupees ($ 193 million) as part of a pre-IPO placement.

The Gurugram-based company said it would use the proceeds of the IPO to repay existing bonds and fund growth, which could include mergers and acquisitions.

Oyo’s technology allows hoteliers to accept reservations and payments online through its platform, among other services. The start-up has grown beyond India and into the United States, Europe and Southeast Asia. It considers India, Indonesia, Malaysia and Europe as its main growth markets.

Last year, a New York Times article cast doubt on the financial health of the Indian start-up, highlighting questionable tactics employed in the pursuit of growth.

The coronavirus pandemic has hammered the hotel industry and the Indian hotel chain has laid off employees to cut costs and losses.

The startup is also the latest among a number of highly regarded Indian tech startups to enter the public market.

Zomato food delivery company debuted in the market in July. Payments giant Paytm has filed for a $ 2.2 billion IPO. Rideshare company Ola plans to raise up to $ 1 billion when it goes public. Flipkart, the Walmart-owned ecommerce player, is also reportedly considering public listing.

– CNBC’s Naman Tandon contributed to this report.