TOKYO -- Oravel Stays, the Indian hotel startup known as Oyo, is planning to raise up to 84.3 billion rupees ($1.1 billion) in an initial public offering on local stock exchanges.
In a draft filing with the local securities regulator dated September 30 and released on Friday, Oyo said it plans to raise 70 billion rupees by issuing new shares, with the remaining funds coming from the sale of shares by existing investors. SoftBank Group's Vision Fund, which holds a 46.6% stake in the company, plans to sell 13.285 billion rupees-worth of shares.
Oyo said it plans to use the proceeds to repay debt and fund growth initiatives. It has not set a price range for the shares but local media have reported that it is seeking a valuation for the company of around $12 billion. Kotak Mahindra, J.P. Morgan and Citigroup are acting as global coordinators.
The move comes on the back of a booming stock market in India and strong appetite for local technology startups. Investor confidence in the travel sector's post pandemic recovery has pushed up share prices of some publicly listed travel companies elsewhere, including Airbnb, the U.S.-based home rental platform.
In the filing, Oyo said it is a "leading new-age technology platform" that empowers the large but fragmented hotel industry by providing a suite of apps to hotel owners and consumers. COVID-19 has hit the travel industry hard but has also propelled digital adoption "with an increased preference for convenience and safety", it added.
Financial and operational figures also highlight Oyo's dramatically scaled-back ambitions. Previously, the company had expanded into more than 80 countries with an ambition of becoming the world's biggest hotel chain by room count, overtaking Marriott, which has about 1.4 million rooms. In the filing, Oyo said it had 157,000 storefronts in 35 countries as of March 31 and is focused on India, Southeast Asia and Europe.
Total income -- a measure of revenue -- for the year ended March 2021 fell 69% from a year earlier to 41.6 billion rupees. Its restated loss for the year narrowed to 33.8 billion rupees from 105.9 billion rupees a year earlier.
A Vision Fund spokesperson declined to comment on its share sale.