Why OYO’s IPO Dreams Keep Slipping and What’s Different in 3rd Attempt - Explained

The IPO journey of hospitality giant OYO looks like a long and winding road as the start-up has already made two failed attempts. Now, Ritesh Aggarwal-led company is entering the third attempt to go public in early 2026. OYO is likely to invite formal pitches from both Indian as well as international bankers next week, according to PTI reports. As of now, the management team of Oravel Stays (parent of OYO) had informal discussions with bankers.

Several banks have suggested that OYO could be valued as high as $10 billion, but the company is setting more modest expectation --- somewhere around $6-7 billion, the report said. OYO is expected to file its draft red herring prospectus (DRHP) in August this year as Ritesh Aggarwal-led company is targeting 2026 to go public.

Just to give some context, OYO has previously submitted a DRHP to the Securities and Exchange Board of India (Sebi) in 2021, aiming for an IPO worth Rs 8,430 crore. However, it withdrew the plan in 2022. And the company again made a second attempt to get listed on Indian stock exchanges in 2023 through a confidential filing process. But it was also shelved the year later.

Why OYO’s IPO Plans Kept Falling Apart?

Sebi has rejected OYO’s IPO plans after multiple attempts and revisions to its DRHP. The markets regulator returned the company’s initial DRHP in January 2023, requesting for updates and revisions. It was concerned about OYO’s KPIs, outstanding litigations, and valuation. The company’s valuation witnessed a huge fall from its peak of $9 billion in 2021 to a potential $2-3 billion for the private funding round.

The company refilled its DRHP with updates in April 2023, but ultimately withdrew its IPO application in May 2024. Instead, it raised around $70-80 million from high-net-worth investors.

In addition, the start-up also faced regulatory scrutiny and legal challenges, including investigations by the Competition Commission of India and disputes with hotel partners over contractual agreements. Its biggest investor, SoftBank, also opposed the timing of the IPO and requested the company to delay its public listing until it demonstrated stronger financial performance.

The Federation of Hotel and Restaurant Association of India has also asked Sebi to reject OYO’s IPO, taking note of its losses in previous years. Zostel, the operator of Zo Rooms, also opposed OYO’s IPO over its shareholding structure and alleged misrepresentations in its DRHP.

All these oppositions came together like a storm against OYO’s IPO, raising concerns about corporate governance and compliance which are critical factors for public investors. But the company stood firm and again tried to make an attempt to go public.

What’s Behind The Third Attempt?

The journey wasn’t trouble-free in the third attempt. This time too, OYO delayed its October-planned IPO after opposition from SoftBank Group Corp and a tumultuous turn in the stock market. SoftBank has balked at the proposed timing and pressed the hospitality major to hold off on an initial public offering until its earning are stronger.

The major driver behind OYO’s renewed IPO push is the pressure stemming from a $2.2 billion loan that the founder took in 2019 to boost his stake in the company. ET stated that the timeline for repaying that loan is closely tied to OYO’s listing plans, with ongoing discussions between the company and its lenders.

Another reason could be OYO’s improved financial metrics and operational efficiency. The report stated that OYO is expected to witness over Rs 620 crore net profits in FY25, showing swift business turnaround.

Recently, OYO has also streamlined its global operations while strengthening its presence in key markets including India, the US, Europe, and Southeast Asia. Its business accelerator division even added 3,500 new corporate clients in FY25, recording 20% growth year-on-year. The travel tech platform also reported a 54% increased in gross booking value to Rs 16,436 crore and its revenue grew to Rs 6,463 crore in the same financial year.

This has renewed investor confidence in OYO’s business model, promoting the fresh attempt at going public. The company will also hold conversation with key investors, including SoftBank which holds about 40% of the company, in June 2025. They are expected to evaluate the IPO application.

It would be interesting to watch OYO’s IPO journey amid all these challenges and regulatory hurdles. And if the travel tech platform successfully launches its IPO in third attempt, the bigger question would be whether it can sustain investor confidence even after IPO withdrawals.