Gurugram-based hospitality unicorn OYO has reportedly pushed back its long-awaited IPO for the third time, following objections from major investor SoftBank and continued uncertainty in global financial markets.
Initially aiming for a public listing by October this year, the company is now expected to delay the launch until March next year, according to a Bloomberg report.
SoftBank, which holds over a 30% stake in OYO, has asked the company to strengthen its financials before going public.
The Japanese investment giant is said to be helping OYO founder Ritesh Agarwal secure an extension on a hefty $2.2 billion personal loan repayment, linked to his move in 2019 to increase his shareholding in the company.
The first installment of $383 million is reportedly due in December 2024, and the IPO was seen as a key step toward meeting that obligation.
While SoftBank is reportedly willing to negotiate terms if the IPO is delayed, OYO has maintained that this financing arrangement is entirely separate and will not impact its public offering timeline, which remains at the discretion of its board.
OYO’s IPO journey has been a rollercoaster. The company first filed its draft red herring prospectus (DRHP) in 2021, targeting INR 8,430 crore, but withdrew plans due to volatile market conditions.
A second attempt in 2023, this time via the confidential route, aimed for a reduced issue size of $400 to $600 million but was also pulled back ahead of a $450 million dollar bond issuance.
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Despite the delays, the company has shown signs of financial turnaround. OYO turned profitable in FY24 with a net profit of ₹229.5 crore, a dramatic reversal from the ₹1,286.5 crore loss it posted in FY23.
However, revenue dipped slightly to ₹5,388.7 crore in FY24 from ₹5,463.9 crore the previous year. For FY25 so far, OYO reported ₹2,100 crore in revenue and expects to achieve ₹1,100 crore in net profit by FY26, according to Agarwal.
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In Q3 FY25 alone (October – December), OYO reported a six-fold jump in profit to ₹166 crore and a 31% year-on-year increase in revenue to ₹1,695 crore. Still, investors seem to want more stability before the company hits the public market.
As the hospitality firm navigates these internal and external pressures, the IPO, once pegged at a valuation exceeding $7 billion, remains in limbo. For now, all eyes are on whether the next few quarters can solidify OYO’s financials enough to win over both regulators and public market investors.
