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SoftBank-backed budget hospitality brand Oyo will pare down the shares it plans on selling with its public market debut by two-thirds, reducing the amount of fresh capital it is expected to raise, said media reports.

A report by Bloomberg said that the company was looking to file a fresh document for its Initial Public Offering (IPO) as soon as this week. However, OYO has reduced its offer-for-sale of shares keeping in view dipping technology stock valuations in the current market. The report quoted anonymous sources stating that OYO’s current investors do not plan on selling their shares as part of the IPO. 

OYO had filed for an IPO of Rs 8,340 crore ($1.1 billion) with SEBI in October 2021 at a valuation of $10 billion, which included a primary capital raise of around Rs 7,000 crore and investors selling shares worth Rs 1,430 crore. At the time SoftBank, which holds 46% stakes in the company, planned on selling shares worth Rs 1,328.53 crore.

However, in May 2022, OYO wrote to SEBI asking to defer the IPO to a later date at a lowered valuation of an estimated $7 billion, according to media reports. This was soon after SoftBank cut the valuation of its investment in OYO down to $2.7 billion in September 2022. 

Founded in 2015 by Ritesh Agarwal, OYO reached a peak of $10 billion in valuation in June 2019 when Agarwal bought $2 billion worth of the company’s shares from Sequoia and Lightspeed Venture Partners, borrowing the sum from Japanese lenders in his personal capacity.

As a result of the purchase, Agarwal held a 33% stake in the company. The company last raised $5 million in a Series F round from Microsoft in September 2021.