What Will Happen To OYO? Before Going Public, The Company Suffered A Big Surprise: Its Value Was Reduced From $10 Billion To $2.5 Billion.

OYO, a budget hotel chain, has suffered a major setback. The hospitality giant Oyo was preparing to launch its IPO when the company got into a huge trouble. In fact, there has been a huge fall in the valuation of the budget hotel company OYO. The valuation of the company was earlier at $10 billion but now it is around $2.5 billion. The situation is that the founder of Oyo, Ritesh Aggarwal, has invested Rs 830 crore in the recent round of funding. This amount of Rs 830 crore has been invested in the latest round of funding of the company through Singapore-based Patient Capital unit. With the help of this investment, Oyo has raised Rs 1,457 crore.

Valuation reduced to $2.4 billion

According to the information, after the new round of funding, Oyo’s valuation has decreased by approximately 75 percent. While in the year 2019, Oyo’s market value was estimated at $10 billion, now its valuation has come down to just $2.4 billion. The first tranche of funding of Rs 416.85 crore was led by Incred Wealth in July 2024. Following this, at the Extraordinary General Meeting of a company on August 8, the shareholders gave their approval to raise another Rs 1,047 crore.

Funding round below July valuation

Incred Wealth has invested Rs 76 crore in this round of funding. J&A Partners of Mankind Pharma Family has invested Rs 120 crore and ASK has invested Rs 14 crore. With this, the company’s valuation has come down from $10 billion in 2019 to $2.4 billion. As per The New Indian Express report, data analytics firm Traxon reported that Oyo’s market value as of July 4, 2024, was $2.72 billion. It has fallen below this level in the funding round.

The initial public offering will not take place for the time being

According to sources, Oyo’s IPO may now be postponed for a long time. The company expects its profits to increase in the coming quarters after the fresh round of funding. Now the company will proceed with the IPO only after making profits for consecutive quarters. Along with this, Ritesh Aggarwal has also assured to reduce his stake in Oyo. After the fresh funding, his stake in the company will increase to 32.57 percent.