Oravel Stays Ltd, which owns and operates hospitality unicorn Oyo Hotels and Homes, has received an in-principle nod from the National Stock Exchange and the Bombay Stock Exchange for its proposed listing, a person with knowledge of the matter told VCCircle.
Oyo now expects the Securities Exchange Board of India (Sebi) to approve its (initial public offering) IPO by as early as the first week of February, the person said, speaking on condition of anonymity.
“The process is ongoing and we have been actively responding to all queries by Sebi. It is taking longer than usual but my guess is, in the next 10 days, we should receive Sebi’s nod for the offer,” the person told VCCircle.
Oyo was prevously expecting to get listed on the bourses by as early as 15 February, another person with knowledge of the matter told VCCircle on condition of anonymity.
Oyo declined to comment.
As it prepares for its listing, Oyo may also have to contend with the recent volatility in the stock markets which has been unforgiving of the newly listed tech startups in India.
SoftBank-backed Oyo had applied for an IPO in October last year. The company’s Rs 8,340 crore worth IPO consists of a fresh issue of shares of as much as Rs 7,000 crore and an offer-for-sale of as much as Rs 1,430 crore. Through the IPO, SoftBank is seeking a partial exit.
Oyo is also in a legal tussle with Zostel Hospitality Pvt Ltd, the operator of Zostel Hostels and Zo Rooms, which had previously written to Sebi urging it to reject Oyo’s draft prospectus and suspend its IPO.
Zostel Hospitality wrote to the Sebi last November arguing that Oyo's capital structure is not yet final. It has argued that it entered into talks with Oyo for a merger in 2015, executing an agreement on 26 November that year. While Zo Rooms completed its obligation under the agreement and transferred the business, Oyo failed to transfer 7% to the Zo Room’s shareholder, Zostel alleged earlier. Oyo has challenged these assertions.
“OYO has been answering all Sebi’s queries on the matter and the legal proceedings will not hurt the company’s IPO proceeds,” the second person cited above told VCCircle.
