Oyo, the Indian hotel chain backed by SoftBank’s Vision Fund, plans to raise $1.16 billion (or 84.3 billion rupees) through an initial public offering (IPO).
As CNBC reported on Friday (Oct. 1), the company plans to issue new shares worth $944 million (70 billion rupees), while existing shareholders could sell up to $193 millon (14.3 billion rupees) worth of their shares.
According to a draft prospectus submitted to Indian market regulators, Oyo would also consider issuing shares worth up to 14 billion rupees ($193 million) in a pre-IPO placement. The company said it would use proceeds from the offering to pay its obligations and fuel growth, possibly through mergers and acquisitions.
In addition to SoftBank, Oyo’s other higher-profile backers include Lightspeed Venture Partners and Sequoia Capital India.
Oyo has a turnkey business model: In exchange for room prices and bookings, independent hotel owners receive a portion of the revenue and fees that are collected, provided they agree to rebrand as an Oyo hotel.
Read more: Indian Hotel Startup Oyo Prepping IPO
As PYMNTS reported last month, Oyo’s business model thrived initially, but faltered thanks to the imposition of COVID-19 travel restrictions in 2020.
Last September, SoftBank — which owns a 46% stake in Oyo — made the decision to lay off staff, while also rescinding $75 million that had been pegged for Oyo’s growth in Latin America. Around that same time, Oyo downsized its Japan operations. In February of this year, Oyo announced it would lay off nearly all of its staff in Latin America and would reduce funding as it pivoted to a digital-only model there.
Oyo’s offering follows a busy IPO season in India. This listing follows other high-profile debuts, including food delivery firm Zomato Ltd, Berkshire Hathaway-backed Paytm and private equity firm TPG-backed Nykaa. Another SoftBank-backed venture, ride-hailing company Ola, is also set to go public.