OYO Postpones India IPO Plans Third Time Amid SoftBank Concerns

Oyo Hotels, the hospitality firm led by Ritesh Agarwal, has postponed its proposed India listing that was initially targeted for October. The delay, reported by Bloomberg, stems from differences with early investor SoftBank, which holds a significant 40% stake in the company. Founder Agarwal owns 30% of the firm.

SoftBank Pushes for Profitability Before IPO

The proposed initial public offering, which was expected later in 2025, has been held off after SoftBank reportedly asked the company to delay the plan until it achieves stronger earnings. Bloomberg cited anonymous sources confirming this stance. 

This development marks yet another postponement for Oyo’s Initial Public Offering (IPO), which was initially planned to go public in 2021, targeting a valuation of up to $12 billion, but had to withdraw due to the impact of COVID-19. A second attempt in March 2023 also did not materialise, as the firm confidentially filed papers with SEBI before delaying the issue again in May.

In an internal email to senior leadership, Ritesh Agarwal stated that the company is on track to achieve over 60% revenue growth in the March quarter of FY25, reaching more than ₹2,100 crore. He added that Oyo expects a profit after tax of ₹1,100 crore and an EBITDA of ₹2,000 crore for FY26, citing strong contributions from its core markets: India and the United States, as well as emerging markets in Southeast Asia and the Middle East.

Debt Obligations and Business Expansion Efforts

The urgency to list had increased in recent months due to an approaching debt repayment deadline. In 2019, Agarwal borrowed $2.2 billion from lenders, including Mizuho Financial Group Inc., backed by a guarantee from SoftBank’s Masayoshi Son. 

The loan was aimed at increasing Agarwal’s stake in Oyo to gain greater strategic control. While the loan was restructured in 2022, the first tranche remains unpaid, with the repayment deadline set for December 2025.

Bloomberg reported that creditors have demanded repayment of $383 million from the loan package if the IPO does not occur by October. Should the IPO go ahead this year, the deadline could be pushed to 2027. However, with the public offering now delayed, SoftBank is expected to support Agarwal in negotiating an extension on the loan.

Read More: OYO Ventures into F&B with In-House Kitchens and QSR Carts!

Conclusion

Oyo’s decision to delay its IPO reflects the strategic tension between growth ambitions and financial discipline. With SoftBank advocating for stronger earnings before public listing and debt repayment deadlines looming, the company is navigating a critical phase in its corporate journey.

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