Sources say OYO has withdrawn its DRHP and plans to refile IPO after refinancing | Business News

Softbank-backed OYO is gearing up to refile its IPO after finalizing its refinancing plans to raise up to USD 450 million through the sale of dollar bonds, according to sources. The global travel tech player has already moved its application with markets regulator SEBI to withdraw its current draft red herring prospectus (DRHP) in preparation for the refinancing.

JP Morgan is expected to lead the refinancing process, with the sale of dollar bonds likely to carry an interest rate of 9 to 10 per cent per annum. OYO’s parent company, Oravel Stays Ltd, recently prepaid a significant portion of its debt through a buyback process, reducing its outstanding loan amount to around USD 450 million.

The refinancing is anticipated to result in annual interest savings of USD 8-10 million in the first year, with further savings expected in the subsequent years. This move is expected to strengthen OYO’s financial position and could potentially lead to an equity round to boost investor confidence before a public listing.

OYO had initially filed for an IPO in September 2021 but delayed the launch due to market volatility. The company is now looking to refile its IPO at a lower valuation of around USD 4-6 billion, compared to the initial target of USD 11 billion. The refinancing and potential equity round are seen as strategic moves to fortify OYO’s financial standing and pave the way for a successful public listing in the future.