OYO’s IPO Reckoning, Rapido Outages, and SBI Trims

OYO is heading to the public markets again. On the surface, this looks like a turnaround story: losses have narrowed, profitability has appeared, and operational discipline is being highlighted. But strip away the investor decks and one truth stands out. This IPO isn’t being driven by ambition. It’s being driven by pressure.

This is OYO’s third IPO attempt in four years. The first, in 2021, collapsed under regulatory scrutiny. The second, filed confidentially in 2023, quietly disappeared. Both failed not because markets were bad, but because the structure beneath the numbers raised too many questions. That structure hasn’t changed meaningfully. It has only been postponed.

Everything starts with one number: $2.2 billion.

That was the personal loan Ritesh Agarwal took in 2019 to buy back shares from early investors. It was framed as founder confidence. In reality, it was leverage stacked on leverage, backed by pledged shares and the assumption that a blockbuster IPO would arrive in time. When the IPO didn’t happen, the entire equation broke.

Every major decision since then - exits from China, asset sales, cost cutting, and now rebranding - flows from that original leverage bet.

The first IPO attempt targeted a valuation of around $12 billion. SEBI pushed back. Litigation with Zostel was unresolved. Losses were still fresh. The filing was withdrawn.

By the second attempt, the cracks were visible. In early 2024, OYO raised emergency capital at a valuation closer to $2.5 billion, simply to stabilise operations. That wasn’t growth capital. It was survival capital.

Now comes the third attempt, this time built around profitability. In FY25, OYO reported ₹623 crore in net profit, a sharp contrast to the ₹13,122 crore loss in FY20. EBITDA is positive. Costs are tighter. On paper, it looks like a clean turnaround.

But the balance sheet tells a tougher story.

OYO’s annual interest burden is around $70 million, uncomfortably close to its annual profit. In simple terms, the business cannot meaningfully deleverage without IPO proceeds. The fresh issue, roughly ₹6,650 crore, is less about funding expansion and more about refinancing past decisions.

That urgency explains the cosmetic reset. The parent company has been renamed PRISM, a clear attempt to distance itself from the baggage of the old OYO narrative. Rebranding, here, isn’t strategy. It’s signalling - aimed squarely at public market investors.

The acquisition strategy adds to the discomfort. OYO has picked up mature, low-growth Western assets like Leisure Group and Motel 6. These aren’t hypergrowth platforms. Globally, hospitality businesses trade at 10-15× EBITDA. Yet the IPO narrative hints at 25-30× multiples. That gap will not be ignored by public market investors.

The unlisted market has already rendered its verdict. OYO’s unlisted shares have fallen from ₹135-140 in 2021 to about ₹27 in 2025, an 80% erosion in value. That isn’t volatility. It’s accumulated scepticism.

Then there’s the founder question. Ritesh Agarwal built OYO fast and aggressively, a style rewarded in private markets flush with capital. Public markets are different. They punish leverage, opacity, and financial engineering. Past issues - vendor disputes, aggressive partner contracts, regulatory fines including a ₹168 crore CCI penalty - don’t disappear just because profits have arrived.

To be clear, OYO today is better run than OYO in 2019. The pivot to an asset-light model was necessary. Exiting loss-making geographies was sensible. But none of this answers the core question investors will ask: Are we funding future growth, or paying for past leverage?

OYO’s third IPO isn’t a victory lap. It’s a reckoning. The company has survived its most reckless phase. Now it must convince public investors that it deserves a premium - not as a startup miracle, but as a disciplined hospitality business.

Whether the market believes that this time will decide not just OYO’s fate, but how forgiving India’s public markets are willing to be toward leveraged founder bets.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Janta Maaf Nahi Karegi”: Rapido App Faces Nationwide Outage

Rapido faced a nationwide outage on Tuesday, with users across multiple cities reporting login failures and disrupted rides as the app returned repeated error messages.

Complaints flooded social media as riders said they were unable to start trips or complete ongoing journeys. With disruptions reported across Delhi NCR, Bengaluru, and Kolkata, the issues at Rapido appeared systemic rather than city-specific.

Read more here

“Iss Race Ka Purana Khiladi Hoon”: SBI Mutual Fund Trims Stake in Delhivery To 5.69%

SBI Mutual Fund has trimmed its stake in Delhivery to 5.69% after selling 18.18 lakh shares, reducing its holding by 0.24% from 5.93% earlier. The asset manager, SBI Mutual Fund, has been steadily paring exposure, down from a 7.91% stake in April 2023.

The move comes even as Delhivery shares are up nearly 18% year to date, buoyed by stronger financial performance and its acquisition of rival Ecom Express.

Read more here

“Ye Rishta Kya Kehlata Hai”: India, NZ Conclude FTA To Bolster Fintech Collaboration

India and New Zealand have concluded negotiations on the financial services annex of their FTA, laying the groundwork for deeper fintech collaboration. The pact allows Indian financial service providers to set up cross-border digital operations in New Zealand, subject to local data sovereignty and privacy norms.

Both sides will also work toward interoperable payment systems to enable real-time cross-border remittances and merchant transactions, signaling a sharper push toward integrated digital finance.

Read more here

1. Anicut Capital has closed its third private credit fund, Grand Anicut Fund IV, at ₹1,275 Cr, exceeding its initial ₹1,000 Cr target and underscoring strong investor appetite for private debt. The fund includes a GIFT City-based dollar feeder to tap global capital and will deploy about ₹80 Cr per deal across sectors.

   Read more here