SoftBank cuts Oyo’s internal valuation to $2.7 Bn

SoftBank has cut Oyo’s valuation to $2.7 billion. SoftBank owns 45% of Oyo, and is the largest investor in the Indian hotel chain. The move comes at a time when Oyo is months away from going public.

Oyo, formally known as Oravel Stays Ltd., filed a fresh round of financial documents with India’s market regulator as it plans for a stock-market debut after cost cuts and recovery in travel helped it reduce losses. The company expects approval from the Securities and Exchange Board of India (SEBI) and aims to tap the market at a valuation of about $5 billion early next year.

Oyo originally planned to raise up to $1.16 billion in the IPO at a valuation of up to $12 billion. However, the company had readjusted expectations to about $7 billion following change in market sentiments along with additional scrutiny of new-age businesses.

The company said, “We are confident that the above speculations about valuation markdown is patently incorrect. Valuation is an outcome of business performance. We have not decided the exact timing for the IPO and the IPO valuation is also highly speculative.”