The Indian hotel-booking company backed by Softbank Group Corp is seeking to raise funds for expansion and cutting debt, the people said.

Avendus Capital Pvt Ltd is advising the company on the fund raise, they said.

The once-high-flying company, founded by Ritesh Agarwal, filed for an initial public offering (IPO) for the second time last March, after slashing the target amount to be raised by about two-thirds, Bloomberg reported.

While the travel market has improved from the pandemic-era trough, Oyo – once valued around US$10 billion (RM47.3 billion) as India’s Airbnb – is yet to decide on a timing for the IPO.

Talks are still ongoing and Khazanah can still decide to not invest, the people said.

Oyo is also holding talks with other investors for the fund raise, they said. Oyo reported a 13 billion rupees (RM737.7 million) net loss in the 12 months ending March 2023.

Representatives for Khazanah and Oyo did not respond to emails seeking comment. A spokesperson for Avendus declined to comment.

Khazanah has been ramping up investments in India with banking companies including logistics provider Xpressbees and fast-food chain Wow! Momos.