OYO races to IPO as debt deadline looms: Report
OYO creditors, including Mizuho Financial Group Inc., are pressuring founder Ritesh Agarwal to settle a $383 million loan—part of a larger financing package—if the company does not go public by October.
Travel tech platform OYO is accelerating its initial public offering (IPO) plans as it nears a crucial year-end debt repayment deadline.
According to Bloomberg, creditors, including Mizuho Financial Group Inc., are pressuring founder Ritesh Agarwal to settle a $383 million loan—part of a larger financing package—if the company does not go public by October.
The report, citing sources, said that lenders seek clarity on Agarwal’s financial position and may extend the repayment deadline to 2027, but only if OYO proceeds with its listing this year.
In 2019, the OYO founder borrowed $2.2 billion—backed by a guarantee from SoftBank chief Masayoshi Son—to increase his stake in OYO and strengthen his strategic control over the company he founded as a teenager. The loan was restructured in 2022, but Agarwal has yet to repay its first tranche, the report said.
OYO has long considered an IPO, but the COVID-19 pandemic derailed its plans. The startup has now resumed discussions with bankers for a potential listing, aiming for a valuation of up to $5 billion, the sources said. SoftBank remains OYO's largest shareholder with a stake exceeding 40%, while Agarwal—whose previous IPO attempts were unsuccessful—holds over 30%.
In a statement, Agarwal’s family office said that OYO's IPO plans—whenever finalised—would take into account the company’s "strong net profits" for the fiscal year ending March 2024 and an "expected strong year" through March 2025.
Regarding reports on financing arrangements and restructuring, the family office dismissed them as "completely incorrect" and labelled them as speculation or rumour-mongering. It also refuted the speculated valuation, stating that it does not reflect reality and is lower than recent secondary transactions known to them.
The Gurugram-headquartered travel tech company, founded in 2013, secured the backing of SoftBank, which encouraged aggressive expansion into markets like Japan and the US—moves that ultimately led to major setbacks. OYO's reliance on budget hotels for price-sensitive customers made it particularly vulnerable to the COVID-19 pandemic, which impacted its business severely.
The company’s struggles—from losses due to overambitious international expansion to legal disputes—reflect India’s venture capital-driven startup boom, which lost momentum as investors shifted focus toward profitability.
Since the pandemic, OYO has gradually recovered, posting a modest profit for the fiscal year ending March 2024 as sales rebounded. In late 2023, Agarwal injected about $95 million into the company through his Singapore-based investment firm, Patient Capital.
OYO reported a net profit of Rs 158 crore in Q2 of FY25. The company managed to report profits for two subsequent quarters of FY25. According to research platform Tracxn, OYO recorded Rs 5,541.6 crore in revenue and a net profit of Rs 229.6 crore for FY24.
The company's recent strategic initiatives include premiumisation efforts of its India portfolio, the acquisitions of US-based hotel major G6 Hospitality and Paris-based rental home player Checkmyguest.
Global Rating agency Moody's had upgraded OYO's rating to B2 from B3 and maintained a stable outlook. It estimates that OYO's EBITDA will reach $200 million in FY25-26, which will be its first full year of earnings consolidation with its newly acquired businesses.
Edited by Suman Singh