Oyo’s parent company, Oravel Stays, is gearing up for its third initial public offering (IPO) attempt as it plans to invite formal pitches from merchant bankers next week. After two previous unsuccessful attempts in 2021 and 2023, the hospitality tech giant is now looking to make its public debut between March and April 2026. According to sources, the company has been in informal talks with banks for the past month and will now begin evaluating official proposals. Some financial institutions are optimistic, suggesting a possible valuation of up to $10 billion, though Oyo’s internal targets remain grounded in the $6–7 billion range. This reflects a more cautious and calculated approach as the company aims to successfully list in Indian markets while attracting global investor interest.

Rising Debt Pressure and Stakeholding Drive IPO Urgency

One of the key factors fueling Oyo’s IPO push is a $2.2 billion loan taken by founder and CEO Ritesh Agarwal in 2019. The loan was used to increase his stake in the company and is now nearing maturity. As repayment deadlines loom, there is growing pressure to generate liquidity, and the IPO is seen as a viable exit and funding route. Discussions with lenders about extending the repayment timeline are reportedly tied to Oyo’s commitment to go public. This mounting financial obligation is likely a major influence on the urgency with which the company is moving forward. Ritesh Agarwal’s personal financial interests and Oyo’s corporate future are deeply intertwined, making this IPO an important milestone for both.

Positive Financial Turnaround Boosts Confidence

Oyo’s latest estimated financial performance is providing the necessary momentum for this third IPO attempt. Reports indicate that the company has posted a net profit of Rs 620 crore in FY25—a major turnaround considering the losses that plagued earlier years. The company’s improved profitability is being cited as a key reason why major shareholders, including SoftBank (which holds approximately 40% equity), are backing the IPO plan. The strategic alignment between Oyo’s board and its key investors signals strong internal confidence. The IPO is expected to include financial data from FY25 as well as the first quarter of FY26, which will be outlined in the draft red herring prospectus (DRHP) likely to be filed by September 2025.

Strategic Realignments and Global Focus Shape Oyo’s IPO Outlook

In the run-up to its public offering, Oyo has streamlined operations and focused on core international markets. It has scaled back operations in underperforming regions while strengthening its presence in key territories such as India, the US, Europe, and Southeast Asia. In 2024, Oyo made headlines by acquiring the US-based Motel 6 for $525 million in an all-cash deal—the company’s largest acquisition so far. To finance this purchase, Oyo raised $825 million in debt from Deutsche Bank. Such bold moves indicate that Oyo is focused on creating a more sustainable, asset-backed growth model. These developments, combined with recent investor funding, have reinforced its valuation as it prepares for a public listing.

Road Ahead: Challenges and Expectations Before 2026 IPO

While Oyo is positioning itself strongly for its third IPO attempt, challenges remain. The success of the listing will depend not only on favorable market conditions but also on how well Oyo can manage its debt, sustain profitability, and win back investor trust. The upcoming board and shareholder meeting in June, especially involving heavyweight investor SoftBank, will be crucial in determining final IPO strategies. If all goes according to plan, Oyo’s IPO could become one of the most significant tech listings in India’s recent history. As it prepares for the public market spotlight, Oyo must now balance aggressive growth with financial prudence and transparency to ensure long-term investor confidence and regulatory approval.

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Source : economictimes.indiatimes.com