Hospitality giant Oyo has documented its draft distraction outline or DRHP with SEBI along with details of its much-awaited Initial Public Offering (IPO). The SoftBank-backed company is slated to raise Rs 8,430 crore in the upcoming public deal constituting a fresh issue of Rs 7,000 crore and a proposal for sale (OFS) of Rs 1,430 crore.

SoftBank Vision Fund will be the greatest beneficiary of the OFS, offloading shares worth Rs 1,328.5 crore while Global Ivy Ventures and China Lodging Holdings will sell stakes worth Rs 23.13 crore and Rs 51.62 crore separately. According to DRHP, Oyo might raise Rs 1,400 crore via private placement in a pre-IPO round before the listing which will lead to a reduction in the size of its IPO to Rs 7,030 crore.

Importantly, its author and CEO Ritesh Agarwal; won’t sell any of his holdings in the upcoming IPO as part of the OFS. Presently, Agarwal is the second-largest shareholder in the company, controlling around 33.15% stake in Oravel Stays Limited which is the holding element for Oyo and its operations around the world. Please allude to the pie chart beneath for the pre-offer shareholding.

The DRHP further states that out of the Rs 7,000 crore to be raised in the fresh issue the company is planning to utilize Rs 2,441 crore for repayment of obligation. Oyo had raised nearly Rs 4,920 crore owing debtors from global institutional investors in July this year to support its operations, which have been hit hard by the Covid-19 pandemic.

The company plans to utilize another Rs 2,900 crore or 41.4% of the fresh issue continues to subsidize organic and inorganic development initiatives and the rest for general corporate purposes.

While the company didn’t unveil any details regarding the value band or valuation at which it plans to raise the upcoming issue, media reports propose that Oyo is looking for a valuation of around $12 billion. The company was last valued at nearly $9.6 billion when it raised assets from Microsoft last month.

Oyo has listed Kotak Mahindra Capital, J.P. Morgan, Citi Group, ICICI Securities, Nomura Financial Advisory, JM Financial Limited and Deutsche Equities as the lead managers for the upcoming IPO in the DRHP.

Like all hospitality chains, Oyo was hit hard by the lockdowns and travel restrictions caused by the COVID 19 pandemic. Nonetheless, the company claims to have seen a resurgence in the scale of its operations starting from the second from last quarter of 2021. Oyo at present has a presence in more than 35 nations worldwide with more than 157,000 inns listed on its platform according to its own site.

In the past a few months, around 10 internet companies have recorded their DRHP ahead of public listing. While Zomato, CarTrade and Freshworks have already had fruitful listings, Paytm, Mobikwik, PolicyBazaar, Nykaa, ixigo and Tracxn are in the pipeline to hit the bourses.

It’s important that Freshworks became the first Indian-origin SaaS company to list on a US stock exchange, NASDAQ in this case.