Indian entrepreneur and founder of Oyo Rooms Ritesh Agarwal. Photo: AFP / Chandan Khanna

Hospitality unicorn Oyo is planning to raise up to 80 billion rupees (US$ 1.2 billion) through an initial public offering soon, multiple media outlets have reported.

The hotel aggregator is expected to file the draft red herring prospectus with the Securities and Exchange Board of India next week, Press Trust of India reports. Oyo has appointed investment banks including JPMorgan, Citi, and Kotak Mahindra Capital to manage its public issue.

According to a regulatory filing, Oyo’s parent company Oravel Stays had last week approved the conversion of the company from a private limited firm to a public limited one.

In a Registrar of Companies (RoC) filing in August, Oyo had said that Microsoft Corporation has invested nearly $5 million through the issuance of equity shares and compulsory convertible cumulative preference shares on a private placement basis.

Microsoft has also entered into a pact with Oyo to develop new travel technologies enabled by its Azure cloud infrastructure and artificial intelligence. The US software giant aims to grab a larger slice of the pandemic-hit and speedily digitizing the global hospitality industry.

In July, Oyo had raised $660 million through the term B loan route from global institutional investors, including Fidelity Investments, to refinance and simplify its existing borrowings.

Japan’s SoftBank owns a 46% stake in Oyo and it also has the backing of Greenoaks Capital and Lightspeed Venture Partners. However during the Covid-19 pandemic last year it had to endure heavy losses and had resorted to salary cuts, layoffs, and furloughing of employees. It later restored the pay cuts after the occupancy rates of its hotels improved with the fall in coronavirus cases and the lifting of lockdowns.

Chief Executive Ritesh Agarwal had said in July that business was likely to return to levels seen before the second wave of COVID-19 infections in India and “grow from there.”

Oyo’s plan to go public follows an impressive debut by food delivery firm Zomato Ltd in July. Digital payments giant Paytm and online beauty and fashion platform Nykaa have also filed for IPO. Ride-hailing firm Ola, which is also backed by SoftBank, is also set to enter markets.

Though India has braved two waves of the Covid-19 pandemic and the economy has taken a toll, the stock markets remain bullish with the benchmark indexes scaling new peaks. With bank interest rates at their lowest, many Indians have begun investing in stocks.