Softbank-backed Oyo: Moving towards an IPO of Rs 8,430 crore, Softbank-backed Oyo is all set to file a revised draft document with markets regulator SEBI. Sources related to this incident have given this information. The company has already received in-principle approval in this regard from the Bombay Stock Exchange (BSE) as well as the National Stock Exchange (NSE), he added.
Questions arising on the success of the listing
OYO is going to file the revised document at a time when questions are being raised whether it will be able to succeed in the listing plan in the current environment. Investors are wary of heavy selling pressure in stocks of loss-making internet companies in India and the US.
Heavy selling in newly listed shares
While Zomato shares hit their lows after the blockbuster listing last year, Paytm, Nykaa and PB Fintech are under heavy pressure. Internet companies such as Zomato, Paytm and Policybazaar were selling off on rising global and domestic bond yields, driving their valuations higher than fundamentals.
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SEBI has received complaints against Oyo
OYO, which filed the draft red-hairing prospectus in September last year, is currently responding to the queries and clarifications asked by the regulators. Last year, Moneycontrol had reported that apart from Joe Rooms, hotel association FHRAI had filed a complaint with SEBI against Oyo and asked market regulators not to approve the company’s IPO.
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Joe Rooms raised the issue of violation of ICDR Regulations alleging that the company has presented false facts regarding litigation in its DRHP.
Objections are in the final round
The Federation of Hotel and Restaurant Associations of India (FHRAI) accused Oyo of making “misrepresentation” by claiming there was no criminal case against them. According to sources, SEBI’s objections are in the final stages and the final stage of objections is expected to come in about 10 days. Therefore, a fresh draft prospectus is expected to be filed in the course of the final objections of the company.
Company can make changes in valuation
Given the current environment, there is a possibility that the company could raise its revised valuation to $9 billion, as the market is re-evaluating the sensitive levels of new economy consumer tech companies. Moneycontrol had earlier reported that the company is targeting a valuation of $12-14 billion.
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