OYO’s $7 Billion IPO Journey Signals New Era for Indian Hospitality Tech

In the dynamic landscape of Indian startups, few stories capture the essence of resilience and strategic pivoting quite like OYO‘s journey toward public listing. The hospitality technology giant has begun discussions with bankers for a potential IPO in the March 2026 quarter, marking its third attempt at going public after previous plans were derailed by market volatility and the company’s internal focus on achieving profitability. This renewed push comes after significant operational restructuring and financial improvements that have transformed the once cash-burning startup into a sustainable business model.

With founder Ritesh Agarwal at the helm and SoftBank’s continued backing, OYO is eyeing a valuation between $6-7 billion—a testament to its evolution from a budget hotel aggregator to a global hospitality technology platform. The company’s journey reflects broader trends in India’s maturing startup ecosystem, where investors increasingly demand clear paths to profitability before public listings. As OYO prepares to file draft IPO papers with SEBI by September, industry watchers are keenly observing whether this third attempt will indeed prove lucky for one of India’s most closely watched unicorns.

OYO’s Transformation Journey: From Losses to Profitability

OYO’s path to its upcoming IPO attempt represents a remarkable business transformation story. Since its first IPO filing in 2021, the company has undergone a strategic overhaul that prioritized sustainable growth over rapid expansion.

“Since its initial IPO attempt, OYO has undergone significant change, focusing on profitability and sustainable growth. The company’s improved financial metrics and operational efficiency have renewed investor confidence, prompting the fresh attempt at going public,” sources close to the matter told Times of India.

This transformation wasn’t merely cosmetic. OYO has systematically restructured its operations, streamlining its global presence to focus on key markets including India, the United States, Europe, and Southeast Asia. This geographic consolidation has allowed the company to concentrate resources where they generate the highest returns.

Financial discipline has become a cornerstone of OYO’s strategy. While the company hasn’t yet released its financial figures for FY2025, reports suggest it has achieved a net profit of approximately ₹620 crore ($74 million). This marks a significant turnaround from its previous loss-making status and demonstrates the effectiveness of its revised business approach.

The company’s improved unit economics reflect several strategic shifts:

1. Prioritizing high-margin properties over pure volume growth
2. Implementing more efficient technology systems to reduce operational costs
3. Focusing on sustainable revenue streams rather than discounting to drive bookings
4. Streamlining staff and reducing overhead expenses

These changes have collectively transformed OYO’s financial profile, making it more attractive to public market investors who typically demand clearer paths to profitability than venture capital backers.

Strategic Timing and Market Conditions

OYO’s decision to pursue an IPO in the March 2026 quarter reflects careful consideration of market conditions and the company’s readiness for public scrutiny. The timing aligns with several favorable factors:

1. Improved Market Sentiment: The Indian stock markets have shown resilience and strength, creating a more receptive environment for new listings compared to the volatile conditions that affected previous attempts.
2. Demonstrated Profitability: By waiting until 2026, OYO can present multiple quarters of profitable operations, addressing a key concern from previous filing attempts.
3. Competitive Positioning: The hospitality sector has stabilized post-pandemic, allowing OYO to demonstrate its competitive advantages in a normalized market environment.
4. Regulatory Preparation: The extended timeline gives the company adequate time to navigate regulatory requirements and prepare comprehensive documentation for SEBI.

According to sources familiar with the matter, OYO plans to file its draft IPO papers with SEBI by September 2025, allowing for approximately six months of regulatory review and market preparation before the targeted listing date.

The company is taking a methodical approach this time, with key discussions scheduled with its board and SoftBank representatives next month. These discussions will likely finalize the IPO structure, valuation expectations, and the roadmap for regulatory filings.

Timeline for OYO’s IPO Journey	Key Milestones
June 2025	Board discussions with SoftBank representatives
July-August 2025	Selection of investment bankers and IPO structuring
September 2025	Filing of draft IPO papers with SEBI
October 2025-February 2026	Regulatory review and investor roadshows
March 2026 Quarter	Targeted IPO launch

Valuation Expectations and Investor Confidence

OYO’s targeted valuation of $6-7 billion for its upcoming IPO represents a realistic assessment based on its current financial performance and market position. This valuation, while substantial, reflects a more measured approach compared to the higher valuations the company commanded during its peak private funding rounds.

Several factors contribute to this valuation framework:

1. Improved Financial Metrics: The shift to profitability provides a concrete basis for valuation calculations based on earnings multiples rather than purely growth-based metrics.
2. Strategic Acquisitions: OYO’s acquisition of the Motel 6 chain in the United States, financed through an $825 million loan from Deutsche Bank, represents its largest acquisition to date and significantly enhances its asset portfolio and revenue streams.
3. SoftBank’s Continued Support: Japan’s SoftBank, which holds over 40% stake in OYO, remains a key backer. Their continued involvement signals confidence in the company’s direction and provides stability to the cap table.
4. Competitive Positioning: OYO has established itself as a technology-driven hospitality platform rather than just a budget hotel chain, commanding premium valuations compared to traditional hospitality companies.

In August 2024, OYO raised ₹1,457 crore ($175 million) from investors, albeit at a significantly reduced valuation compared to its peak. This funding round demonstrated that despite valuation adjustments, investor interest in the company remains strong, particularly as it demonstrates improved financial discipline.

The company’s valuation expectations also reflect broader market trends for technology-enabled businesses in the hospitality sector, which typically command higher multiples than traditional hotel operators due to their scalability and lower capital intensity.

SoftBank’s Role and Strategic Investors

SoftBank’s continued involvement in OYO represents one of the most significant factors in the company’s IPO journey. As OYO’s largest shareholder with over 40% stake, the Japanese investment giant’s support provides crucial stability and credibility.

Next month’s scheduled discussions between OYO and SoftBank representatives will likely shape key aspects of the IPO strategy, including:

1. Offer Structure: Determining the mix of fresh equity issuance versus secondary sales by existing investors
2. Valuation Parameters: Establishing realistic valuation benchmarks acceptable to both new and existing investors
3. Post-IPO Governance: Defining board composition and voting rights structures after the public listing
4. Lock-up Arrangements: Setting appropriate lock-up periods for existing shareholders

Beyond SoftBank, OYO’s investor base includes several prominent global investment firms whose continued support will be crucial for a successful public offering. The company’s ability to maintain these relationships while attracting new public market investors will significantly influence its IPO reception.

The IPO will also test the market’s appetite for SoftBank-backed companies, particularly given the mixed performance of some of the investment firm’s other portfolio companies that have gone public in recent years.

Global Expansion and Strategic Acquisitions

OYO’s evolution from a budget hotel aggregator in India to a global hospitality technology platform has been marked by strategic international expansion and key acquisitions. The company has rationalized its global footprint to focus on markets with the highest growth potential and profitability.

The acquisition of the Motel 6 chain in the United States represents OYO’s most significant strategic move to date. Financed through an $825 million loan from Deutsche Bank in December 2024, this acquisition:

1. Established OYO as a major player in the U.S. budget hospitality market
2. Added substantial physical assets to its previously asset-light model
3. Created immediate revenue streams from an established brand
4. Provided a platform for implementing OYO’s technology solutions at scale

Beyond the U.S., OYO has streamlined its operations to focus on key markets including India, Europe, and Southeast Asia. This geographic consolidation has allowed for more efficient resource allocation and better unit economics.

The company has also expanded its service offerings beyond traditional hotel stays. In early 2025, OYO acquired Australian company MedComfy, enabling it to enter the short-term medical accommodation market. This diversification into specialized accommodation segments represents a strategic move to capture higher-margin business.

Regulatory Landscape and Compliance Challenges

As OYO prepares for its third IPO attempt, navigating India’s regulatory landscape presents both challenges and opportunities. The Securities and Exchange Board of India (SEBI) has increasingly focused on ensuring that companies seeking public listings demonstrate clear paths to profitability and sustainable business models.

OYO’s plan to file draft IPO papers with SEBI by September 2025 gives the company adequate time to address potential regulatory concerns. Key regulatory considerations include:

1. Financial Disclosures: Providing comprehensive and transparent financial information, particularly regarding its global operations and subsidiary structures
2. Related Party Transactions: Clearly documenting and justifying any significant transactions between OYO and entities connected to its founder or major investors
3. Corporate Governance: Demonstrating robust governance frameworks that meet public company standards
4. Business Model Sustainability: Providing evidence that recent profitability is sustainable rather than temporary

The company’s previous experience with the IPO filing process, though ultimately unsuccessful, provides valuable insights into potential regulatory hurdles. This institutional knowledge should help OYO prepare more effectively for regulatory scrutiny this time around.

Industry experts suggest that SEBI’s increased scrutiny of new-age technology companies has actually benefited the overall market by ensuring that only well-prepared companies with sustainable business models reach public investors.

The Road Ahead: Challenges and Opportunities

As OYO embarks on its third attempt at going public, several challenges and opportunities will shape its journey toward a successful listing:

Challenges:

1. Market Volatility: Global economic uncertainties and potential market corrections could impact investor appetite for new listings.
2. Competitive Pressures: Increased competition in the hospitality technology space from both established players and new entrants could pressure margins.
3. Regulatory Scrutiny: Enhanced regulatory focus on new-age companies could extend the approval timeline.
4. Investor Skepticism: Previous withdrawn IPO attempts might create some investor hesitation that needs to be overcome.

Opportunities:

1. Demonstrated Profitability: OYO’s shift to profitability addresses a key concern from previous attempts.
2. Strategic Acquisitions: Recent acquisitions like Motel 6 provide tangible assets and revenue streams that strengthen the investment case.
3. Technology Integration: Advanced AI and automation capabilities can further improve operational efficiency and margins.
4. Market Recovery: The post-pandemic recovery in travel and hospitality creates favorable tailwinds.

The company’s success will largely depend on its ability to maintain financial discipline while continuing to innovate and expand strategically. The next few months of preparation will be crucial in determining whether this third attempt will indeed prove lucky for OYO.

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