Before Oyo's IPO, Microsoft is in talks to invest in the internet hotel operator at a $9 billion valuation. The Microsoft-Oyo partnership could be announced in the coming weeks, and it's expected to be a forerunner to the hotel chain's initial public offering.

If the transaction goes through, Oyo may use Microsoft's cloud services as well. According to Reuters, Oyo founder and CEO Ritesh Agarwal stated that the Gurgaon-based company is considering an IPO, although he did not disclose a timeline.

The SoftBank-backed Oyo is the largest hotel chain in India and sixth largest globally. Founded by Ritesh Agarwal in 2013, it aggregates bookings for budget hotels around the globe. Oyo is present in over 415 Indian cities with 18,000 properties in India. It has over 1 million rooms globally and over 23,000 exclusive hotels across 800 cities.

COVID-19 pandemic skewered the hotel chain's business as it saw massive layoffs, cost cuts and losses. Earlier this month, Oyo Hotels & Homes secured $660 million in debt financing from global institutional investors to service its existing loans. Besides servicing its existing loans, the online hotel aggregator aims to recover from the losses caused due to COVID-19 second wave.

This funding round involved Fidelity Investments, Varde Partners and Citadel Capital Management. The hospitality company is the first Indian firm to raise capital via term loan B (TLB) route. TLB refers to a portion of senior secured syndicated credit facility from international institutional investors.