Oyo's Value Has Been Reduced By SoftBank To $2.7 Billion: Report

According to TechCrunch on Thursday, Masayoshi Son-led SoftBank has reduced the internal valuation of Ritesh Agarwal-run Oyo from its previous estimated valuation of almost $10 billion to $2.7 billion.

The major in hospitality is preparing for its initial public offering (IPO) in the coming months, so the rumored valuation decrease is timely.

According to the report, which cited a source, SoftBank is Oyo's largest investor, holding a 45 percent stake. This estimate "is a strong signal of the startup`s current health". According to a company spokeswoman, the story is "inaccurate" and has "no rational basis" because the business' finances have really improved.

"We are certain that the valuation markdown speculations mentioned above are demonstrably false. A result of company performance is valuation. According to our most recent audited results, we recorded a first-ever adj EBITDA profit of Rs 7 crore in the June quarter, with a gross profit margin of 41% and a growth in gross booking value per hotel per month of 45% compared to the prior financial year "In a statement, the company spokesperson said.

The representative continued, "There is no rational basis for a markdown,"  Sequoia India and Lightspeed Venture Partners India are two of Oyo's other major partners. The hospitality industry leader has submitted an amendment to its previously submitted draught red herring prospectus (DRHP), filed in October 2021 for its initial public offering (IPO) to the Securities and Exchange Board of India (SEBI).

Given the unstable state of the world markets, the company is now targeting early 2023 for its IPO. In India, the DRHP amendment also led to significant controversy.