Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<ul>
<li>Hospitality start-up, <a href="https://www.smartkarma.com/entities/oyo-pvt-ltd" target="_blank" data-smartkarma-citation="entities:28861:1" rel="noopener">Oyo (1698548D IN)</a> is trying to ride the Indian IPO wave with a $1.1bn IPO in India. The company filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on the 1st of October 2021 to commence the IPO process while there is an ongoing legal battle between Oyo and the backpacker hostels chain Zostel.</li>
<li>Zostel has requested SEBI to reject Oyo’s draft prospectus stating that Oyo’s capital structure in the draft prospectus fails to recognise Zostel’s right to receive 7% of the share capital of Oyo as a result of a merger agreement between Oyo and Zostel in 2015.</li>
</ul>


Hospitality start-up, Oyo (1698548D IN) is trying to ride the Indian IPO wave with a $1.1bn IPO in India. The company filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on the 1st of October 2021 to commence the IPO process while there is an ongoing legal battle between Oyo and the backpacker hostels chain Zostel.
Zostel has requested SEBI to reject Oyo’s draft prospectus stating that Oyo’s capital structure in the draft prospectus fails to recognise Zostel’s right to receive 7% of the share capital of Oyo as a result of a merger agreement between Oyo and Zostel in 2015.


Oyo’s IPO Plan Could Stumble Amidst Ongoing Litigations

Indian hospitality start-up, <a href="https://www.smartkarma.com/entities/oyo-pvt-ltd" target="_blank" data-smartkarma-citation="entities:28861:1" rel="noopener">Oyo (1698548D IN)</a> is a digital platform connecting over 157,000 storefronts (hotels and homestays) with consumers. The company is trying to ride the Indian IPO wave with a $1.1bn IPO in India.Oyo is 46.6% owned by the Softbank Vision Fund and it is another example of a typical Softbank Investment like <a href="https://www.smartkarma.com/entities/the-we-company" target="_blank" data-smartkarma-citation="entities:28061:1" rel="noopener">The We Company (WeWork) (WE US)</a> and <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a>. Oyo’s old business model was a complete disaster, and it almost ran the company into the ground. The new business model makes Oyo look more like a marketplace for lodging. Despite changes to the business model, we continue to have concerns as Oyo could be neither growth nor profits business under its new business model.

Indian hospitality start-up, Oyo (1698548D IN) is a digital platform connecting over 157,000 storefronts (hotels and homestays) with consumers. The company is trying to ride the Indian IPO wave with a $1.1bn IPO in India.Oyo is 46.6% owned by the Softbank Vision Fund and it is another example of a typical Softbank Investment like The We Company (WeWork) (WE US) and Uber (UBER US). Oyo’s old business model was a complete disaster, and it almost ran the company into the ground. The new business model makes Oyo look more like a marketplace for lodging. Despite changes to the business model, we continue to have concerns as Oyo could be neither growth nor profits business under its new business model.

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<a href="https://www.smartkarma.com/entities/oyo-pvt-ltd" target="_blank" data-smartkarma-citation="entities:28861:1" rel="noopener">Oyo (1698548D IN)</a> is looking to raise up to US$1.1bn in its upcoming India IPO. The deal will be run by Deutsche Bank, ICICI Securities, JM Financial, Nomura and joint global coordinators include Citigroup, JP Morgan and Kotak. Oyo runs a digital platform that serves as a hotel aggregator between Patrons, which include owners and lessors, and Customers, such as travelers and guests booking for accommodation. Patrons list their digitally-enabled storefronts on the firm’s platform, which can be booked by customers through the firm’s direct to consumer (D2C) channels or via its indirect channels with third-party online travel agencies (OTAs). As at Mar 2021, there were more than 157,344 storefronts across more than 35 countries listed on Oyo’s platform.

Oyo (1698548D IN) is looking to raise up to US$1.1bn in its upcoming India IPO. The deal will be run by Deutsche Bank, ICICI Securities, JM Financial, Nomura and joint global coordinators include Citigroup, JP Morgan and Kotak. Oyo runs a digital platform that serves as a hotel aggregator between Patrons, which include owners and lessors, and Customers, such as travelers and guests booking for accommodation. Patrons list their digitally-enabled storefronts on the firm’s platform, which can be booked by customers through the firm’s direct to consumer (D2C) channels or via its indirect channels with third-party online travel agencies (OTAs). As at Mar 2021, there were more than 157,344 storefronts across more than 35 countries listed on Oyo’s platform.

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Softbank shares have returned to the pre-Coupang levels of early February, driven by increasing concerns about the value of the Vision Fund portfolio that remains private.  Number one on the list is the potential for second-order effects from the Greensill bankruptcy which not only cost Vision Fund $1.5bn in lost equity but also includes a further $1.2bn in debt exposure and a potential cash squeeze for other Vision Fund companies that were also clients.

Softbank shares have returned to the pre-Coupang levels of early February, driven by increasing concerns about the value of the Vision Fund portfolio that remains private.  Number one on the list is the potential for second-order effects from the Greensill bankruptcy which not only cost Vision Fund $1.5bn in lost equity but also includes a further $1.2bn in debt exposure and a potential cash squeeze for other Vision Fund companies that were also clients.

Softbank Group - Concerns on the Value of Private Vision Fund Assets Re-Surface

Coupang’s monster IPO is very likely to be the highlight of Vision Fund 1 and provides a solid counterpoint to the WeWork debacle early in the IPO cycle but there remains a significant number of portfolio companies still to come. At Q3 results, Softbank talked about an ongoing parade of companies coming to market with 10-15 annual events but there is a push to get companies to list whilst markets are still receptive and FY21 could see up to 20 companies hit public markets.That is positive for Softbank shares which tend to rise in anticipation of surfaced value, again assuming the IPO market remains open. It also serves to highlight the main risk for Softbank shares as a sustained tech sell-off would lower the value of the Vision Fund portfolio, increase concerns about Northstar and lower expectations for the current crop of IPO hopefuls.<h2>Highlights</h2>Softbank Vision Fund could see up to 20 companies hitting public markets 2021 should favorable conditions continue. Vision Fund says it is encouraging companies to go public whilst conditions are still receptive and Q4 (Mar) can already boast of two listings, a SPAC merger and two more listings in process. Leading candidates to go public include Didi Chuxing and GrabCoupang upside alone doubles total returns and will boost Vision Fund to its best quarter ever.  As of mid-March, Vision Fund’s public portfolio is up $27bn versus $13bn in Q2, $8bn in Q2 and $2bn in Q1. On the aggregate, it more than doubles the Vision Fund total return There may upside in the private portfolio too as Cruise raised funds in January at a 58% premium. It is usually a mug’s game trying to figure out where private valuations will end up but the Cruise stake is large enough to outweigh a lot of smaller changes for other portfolio companies. Cruise raised $2bn in January at a $30bn valuation, a 58% premium to where Softbank invested and a possible $1.3bn unrealized gain ($2.25bn &gt; $3.55bn)Portfolio company View went public through a SPAC merger but at an apparent loss for Vision Fund.  Smart glass maker View’s SPAC merger closed 9 March, the day before the Coupang IPO but it appears Softbank’s original $1.1bn investment is worth barely half that. That is a fraction of the Coupang upside but is a reminder that valuations can go both ways. Other problem investments include Greensill, Katerra, Oyo and OakNorth

Coupang’s monster IPO is very likely to be the highlight of Vision Fund 1 and provides a solid counterpoint to the WeWork debacle early in the IPO cycle but there remains a significant number of portfolio companies still to come. At Q3 results, Softbank talked about an ongoing parade of companies coming to market with 10-15 annual events but there is a push to get companies to list whilst markets are still receptive and FY21 could see up to 20 companies hit public markets.That is positive for Softbank shares which tend to rise in anticipation of surfaced value, again assuming the IPO market remains open. It also serves to highlight the main risk for Softbank shares as a sustained tech sell-off would lower the value of the Vision Fund portfolio, increase concerns about Northstar and lower expectations for the current crop of IPO hopefuls.HighlightsSoftbank Vision Fund could see up to 20 companies hitting public markets 2021 should favorable conditions continue. Vision Fund says it is encouraging companies to go public whilst conditions are still receptive and Q4 (Mar) can already boast of two listings, a SPAC merger and two more listings in process. Leading candidates to go public include Didi Chuxing and GrabCoupang upside alone doubles total returns and will boost Vision Fund to its best quarter ever.  As of mid-March, Vision Fund’s public portfolio is up $27bn versus $13bn in Q2, $8bn in Q2 and $2bn in Q1. On the aggregate, it more than doubles the Vision Fund total return There may upside in the private portfolio too as Cruise raised funds in January at a 58% premium. It is usually a mug’s game trying to figure out where private valuations will end up but the Cruise stake is large enough to outweigh a lot of smaller changes for other portfolio companies. Cruise raised $2bn in January at a $30bn valuation, a 58% premium to where Softbank invested and a possible $1.3bn unrealized gain ($2.25bn &gt; $3.55bn)Portfolio company View went public through a SPAC merger but at an apparent loss for Vision Fund.  Smart glass maker View’s SPAC merger closed 9 March, the day before the Coupang IPO but it appears Softbank’s original $1.1bn investment is worth barely half that. That is a fraction of the Coupang upside but is a reminder that valuations can go both ways. Other problem investments include Greensill, Katerra, Oyo and OakNorth

Softbank Group - Vision Fund’s Race to Liquidity

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Oyo (1698548D IN)

Oyo’s IPO Plan Could Stumble Amidst Ongoing Litigations

Oyo did not seem all that attractive regardless of the pending litigation issues. Its old business model was a failure and the new model is...

Oshadhi Kumarasiri

Oyo IPO: Flying Blind

Oyo is a typical Softbank Investment. Its old business model was a complete disaster, and it almost ran the company into the ground. The new...

Oshadhi Kumarasiri

Oravel Stays (Oyo) Pre-IPO Tearsheet

Oyo (1698548D IN) is looking to raise up to US$1.1bn in its upcoming India IPO. The deal will be run by Deutsche Bank, ICICI Securities, JM...

Clarence Chu

Softbank Group - Concerns on the Value of Private Vision Fund Assets Re-Surface

Softbank shares have returned to the pre-Coupang levels of early February, driven by increasing concerns about the value of the Vision Fund...

Kirk Boodry

Softbank Group - Vision Fund’s Race to Liquidity

Vision Fund is pushing portfolio companies to go public (up to 20 this year!) which should help the discount but also depends a lot on how tech...

Kirk Boodry

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