Lenders want clear visibility on Agarwal’s liquidity and will potentially allow him to delay the repayment until 2027 only if Oyo lists this year, they said, asking not to be named as the matter is private.
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Agarwal, 31, borrowed $2.2 billion in 2019, with a guarantee from backer SoftBank Group Corp.’s boss Masayoshi Son, to increase his stake in Oyo and gain more strategic control over a company he built in his teens. That loan was restructured in 2022, and Agarwal is yet to pay back its first tranche, the people said.
Oyo, once one of SoftBank’s most prominent investees, has explored a stock-market debut for years — until Covid-19 wiped out once-stellar growth. The startup has now begun discussions with bankers for an IPO valuing the firm at as much as $5 billion, the people said.
SoftBank is its largest shareholder with a stake of more than 40%. Agarwal, whose previous plans to list Oyo floundered, owns more than 30%. Agarwal’s family office, when asked for a comment, said Oyo’s IPO plan “whenever it’s decided would consider its strong net profits” for the year through March 2024 and “expected strong year” ending March 2025.
“A lot of the information regarding the financing arrangement and the so-called restructuring is completely incorrect and just speculation or rumor-mongering,” it said. “The speculated valuation is also separated from reality and lower than the secondary transactions that we are aware of.” SoftBank representatives didn’t immediately respond to a request for comment outside regular business hours. Mizuho representatives also didn’t respond.
Agarwal founded Oyo, India’s answer to Airbnb Inc., in 2013 after dropping out of college. He soon won the backing of SoftBank’s Son, who mentored the young entrepreneur and urged him to rapidly expand in markets like Japan and the US — with disastrous consequences. The Covid-19 pandemic also hammered Oyo’s business that rests on cheap hotels for price-sensitive
customers. The upstart’s troubles — including its losses on aggressive overseas expansion and legal disputes — epitomize India’s venture-funding-fueled boom that fizzled as investors turned their focus on profitability.
Oyo has made a gradual recovery after coronavirus infections subsided and the world opened up — it eked out a small profit for the fiscal year through March 2024 as sales recovered. Late last year, Agarwal infused about ₹8.3 billion ($95 million) in the company through his Singapore-based
investment firm.
