Personal care firm Mamaearth has scrapped its initial public offering (IPO) preparations and Oyo is now making its second try at an IPO. SoftBank-backed hotel business OYO intends to cut the number of shares sold via its listing. Oyo made this choice while taking the declining capital demand and technological difficulties into consideration. Oyo had originally applied for its IPO based on its need for finance. Yet, the corporation is no longer required to decrease its equity by that much. The business intends to scale back its initial public offering to just one-third of its original size.
Existing OYO investors won’t have their shares made available through the IPO. Airbnb is a supporter of the hospitality business in addition to SoftBank. OYO is expected to generate Rs 5,700 crore in revenue for FY23, up 19% from ₹ 4,780 crore in the prior year. In FY24, the firm is anticipated to generate an adjusted EBITDA of around ₹ 800 crore. The business is advocating for steps to keep a healthy cash position and carry on with its cost-effective operations. The firm has seen consistent development in the US, Indonesia, and India. The Gurugram-based business has also submitted paperwork for a September 2021 ₹ 8,430 crore IPO. Nevertheless, the business later abandoned its ambition to list owing to the market slump.
The business was requested by SEBI to re-submit its DRHP after submitting the document a second time after more than a year. The business was ordered to resubmit its listing application with changes by SEBI in January of this year. The content in these revisions is principally focused on risk concerns and the foundation for active IPOs. OYO has not yet submitted their DRHP again.
It is made clear that Mamaearth is speaking with SEBI about the DRHP and is waiting for official permission. The business will have 12 months to submit the draught and launch the IPO following this permission, in accordance with the rules. With the help of its bankers, the company will make this decision. According to rumors, once the company introduces them, pricing and valuation will be established as part of the marketing program. The promoters will retain more than 97% of their ownership in the firm even after the IPO, and Mamaearth’s largest shareholder is not selling a single share.
As a result, the business is focused on the long term rather than on correcting short-term values. A total of $126 million has been raised by the Gurugram-based company from investors including Sequoia and Sofina of Belgium. When it secured $52 million in a fundraising round headed by Sequoia in January 2022, MamaEarth had a prior valuation of $1.2 billion. Originally, Reuters claimed that Honasa Consumer, Mamaearth’s parent company, had postponed the IPO because of the unstable market.
