BENGALURU: SoftBank Group -backed Indian hospitality startup Oyo Hotels and Rooms is expected to file for an initial public offering (IPO) next week to raise around $1 billion, a source told Reuters on Thursday.

The hotel aggregator is looking to list in India's financial capital of Mumbai and its IPO is tentatively pegged at between $1 billion and $1.2 billion, the source said, adding it will consist of a fresh issue of shares and an offer for sale from existing shareholders.

Oyo did not immediately respond to a request for comment.

The listing plan follows a stellar debut by food delivery firm Zomato Ltd in July. Berkshire Hathaway Inc-backed Paytm and private equity firm TPG-backed Nykaa have also filed for IPO. Ride-hailing firm Ola, which is also backed by SoftBank, is also set to enter markets.

Oyo, in which SoftBank owns a 46% stake and is one of its biggest bets, has endured months of layoffs, cost-cuts and losses during the global health crisis.

Its founder and Chief Executive Ritesh Agarwal had said in July that business was likely to return to levels seen before the second wave of COVID-19 infections in India and "grow from there".

Last month, Oyo received a $5 million investment from Microsoft Corp. Kotak Mahindra Capital, JP Morgan and Citi are the bankers advising Oyo on the IPO, the source said.