Oravel Stays limited has also joined the domestic IPO fiesta as the operator of OYO Rooms has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). Founded by Ritesh Agarwal and backed by Softbank, the hospitality startup is eyeing to raise about Rs 8,430 crore via its initial stake sale, the draft paper said.

The unicorn's IPO will consist of the issuance of a fresh issue of equity shares worth Rs 7,000 crore, with a face value of Re 1 each, and an offer for sale (OFS) of up to Rs 1,430 crore by promoters and existing shareholders. This makes the 83% issue is the fresh one, whereas 17% of the issue is an offer for sale.

The hospitality tech player is considering issuing shares worth Rs 14,300 crore ($193 million) in a pre-IPO fundraise. Interestingly, any major investor or the founder Ritesh Agarwal, who holds a 34% stake in the company, will not be diluting any stakes in the company in this IPO, which is expected to launch by end of this year or in January.

SoftBank owns over 45% of the Gurugram-headquartered startup. Other investors include Lightspeed Venture, Airbnb, Grab, Microsoft, and Sequoia Capital. With its IPO filing, Oyo has joined a host of top tier Indian tech startups including Paytm, PolicyBazaar, Nykaa, and others, making their way to capital markets Online food delivery firm Zomato, in July, made a stellar debut on the bourses here setting the stage for domestic startups to ride on the current IPO wave. Prior to this, EasyTripPlanners made its debut. In the OFS, SVF India Holdings (Cayman) will offload a stake worth Rs 1,328.53 crore, whereas A1 Holdings Inc will sell shares worth Rs 51.62 crore. Following the suite, China Lodging Holding (HK) will sell equity shares worth Rs 23.13 crore and Ivy Ventures LLP will sell shares worth Rs 26.71 crore.

The proceeds from its fresh issuance worth Rs 2,900 crore will be utilized for organic and inorganic growth initiatives, whereas Rs 2,441 crore will be utilized for the repayment and/or prepayment of certain borrowings. The remaining proceeds will be used for general corporate purposes. 75% of the net offer has been reserved for qualified institutional buyers. 15% of the offer shall be available for non-institutional investors and the remaining 10% shall be available for allocation to retail individual bidders. In the financial year 2020-21, Oyo Rooms reported a 52% fall in revenue to Rs 6,329.73 crore against a revenue of Rs 13,168.15 crore a year ago.

The company reported a restated loss from continuing operations of Rs 2,294.31 crore in the fiscal year ended on March 31, 2021, which was Rs 11,079.79 crore in the previous financial year. Oyo has appointed Kotak Mahindra Capital, JP Morgan India, and Citigroup Global Markets India as the global co-ordinators and BRLMs to the issue, whereas Link Intime India has been chosen as the registrar to the issue. ICICI Securities, Nomura Financial Advisory and Securities (India), JM Financial, and Deutsche Equities India are the merchant bankers to the issue.