OYO IPO Delay Rings Alarm Bells: Is India’s Unicorn Hype Fading ?

3 May 2025

OYO’s IPO Woes: The Third Time’s Not the Charm

OYO, India’s budget hotel chain-turned-tech unicorn, has once again postponed its much-anticipated IPO—this time to March 2026. Initially scheduled for 2022 and then rescheduled in 2023 and 2025, the IPO has now been pushed back after concerns from lead investor SoftBank. The issues: lack of profitability, questionable valuation, and overall market readiness.

SoftBank holding the largest stake in OYO has raised red flags over the company’s IPO valuation, pushing for better financial visibility before going public. The expected valuation is now down to $7 billion, far below its earlier $12 billion peak. Though OYO has made headway in top-line growth, its bottom line especially from international markets continues to be a drag.

This delay is more than a corporate setback. It’s a litmus test for India’s unicorn ecosystem.

The Pattern Is Clear: IPO Dreams on Hold

OYO isn’t the only one pulling the brakes. Several prominent Indian startups are finding the IPO road bumpier than expected:

Ather Energy has shelved its IPO plans due to concerns around profitability in India’s rapidly evolving but capital-intensive EV sector.
Ola Electric slashed its IPO size to adjust for lackluster investor sentiment and scrutiny of unit economics.
boAt, PharmEasy, and MobiKwik have similarly delayed listings amid regulatory issues and market readiness concerns.

What connects these companies? Most are burning capital, still chasing scale, and have yet to establish strong unit economics. In today’s market, that’s no longer enough.

Investor Sentiment Has Turned: Hype Isn’t a Moat

In the early 2020s, startup IPOs were treated like festivals. Zomato, Nykaa, and Paytm were cheered despite posting losses. But their post-listing performance told a different story. Retail investors felt the pinch, and institutions grew wary.

Now, the bar is higher. Investors are looking for

Clean corporate governance
Positive cash flow or visible profit pathways
Valuations that match fundamentals

Even globally, IPOs like Reddit’s faced intense scrutiny and tempered valuations. The investor lens has shifted—speculation has given way to accountability.

Systemic Impacts: Why This Matters for the Startup Ecosystem

The OYO delay is part of a larger pattern that could reshape India's startup funding landscape

1. VC Exits Drying Up

Without IPOs, venture capital firms and early investors face exit bottlenecks, making them hesitant to back new rounds or fresh ventures. This slows the funding pipeline.

2. Valuation Repricing

Unicorns may be forced to cut their lofty private valuations to align with what public markets are actually willing to pay—hitting employee stock options and future capital raising.

3. Capital Rotation to Traditional Sectors

Investor appetite is shifting toward traditional industries—banks, manufacturing, energy, and FMCG—which offer better clarity on earnings and stability in volatile markets.

4. It’s Not Just India

This is not an India-specific trend. In the US, Europe, and Southeast Asia, many late-stage startups are facing IPO fatigue and down rounds. The message: without sustainable profits, even global unicorns can stumble.

Looking Ahead: The Startup Dream Isn’t Over It’s Evolving

India remains a fertile ground for innovation. But going public is no longer just about scale or market share. It's about sustainability, governance, and execution. The OYO story is a reminder that IPO readiness is about more than narrative it’s about numbers.

While the current sentiment may seem tough, this recalibration could strengthen the ecosystem in the long run. Unicorns that survive this scrutiny will be far more resilient and valuable

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Disclaimer:

This article is for informational purposes only and should not be considered financial advice. Finblage does not hold any research analyst license and does not recommend buying, selling, or holding any specific securities. Please consult with a certified financial advisor before making investment decisions.