Oyo Hotels Eyes $400 Million Funding in Talks with Malaysia’s Khazanah Nasional Berhad

Oyo Hotels & Homes Pvt., the Indian hotel-booking company backed by SoftBank Group Corp. and on the verge of an IPO, is currently discussing with Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, for a funding round. 

Sources reveal that Oyo aims to raise close to $400 million to fuel its expansion efforts and address existing debt concerns. Avendus Capital Pvt. is reportedly advising Oyo on this funding initiative. If successful, this funding round could represent its first major fundraising in two years.

Amid preparations for its impending IPO, Oyo is actively engaging with Khazanah Nasional Berhad to secure funds at a valuation of $6 billion, according to insider information. This potential deal shows the continued interest of the Malaysian sovereign wealth fund in Indian ventures. 

For Oyo, the infusion of fresh capital would be crucial as it plans to enhance its financial standing and advance its ambitious expansion plans to help its broader strategy to become a publicly listed company.

Oyo Hotels & Homes, once valued at around $10 billion and often referred to as India’s equivalent of Airbnb, filed for its second initial public offering (IPO) in March. However, it had to slash the target amount to be raised by approximately two-thirds. 

The company, founded by Ritesh Agarwal, is deliberating on the timing for the IPO, even as the travel market has shown improvement from the pandemic-era lows. Despite its past glory, Oyo is currently deciding how to proceed with the IPO, which was initially expected to raise between $400 million and $600 million.

As discussions with Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, are in the early stages, sources close to the matter suggest that the talks are preliminary, with Avendus Capital advising on the deal. 

Oyo remains tight-lipped about the developments, with queries to the company yielding no response as of the time of this report. The potential funding injection from Khazanah Nasional Berhad would be directed toward Oyo’s expansion plans and debt repayment. Notably, Oyo secured a $660 million term loan debt in July 2021, and the startup is exploring options to manage its financial obligations as it navigates the complexities of the IPO landscape.

Last year, Oyo had outlined plans to make payments amounting to $195 million to repurchase 30% of its outstanding Term Loan B (TLB). The debt repayment, scheduled for June 2026, is anticipated to be fully funded with cash from the balance sheet and the cash collateral account. 

While talks with Khazanah Nasional Berhad are ongoing, there is no assurance of their investment as the sovereign wealth fund may decide not to proceed, according to insiders. 

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