Hotel aggregator Oyo files draft prospectus for ₹8,430-cr IPO
Amid rising concern on the business performance of start-ups, hotel rooms aggregator Oyo Hotels, on Monday (September 19), announced a revival of plans to launch an initial public offering (IPO).
The Gurugram-based company has been on a cost-cutting spree to recover from the pandemic stress. A post-pandemic revival of domestic and international travel has also helped Oyo trim its losses.
On Monday, Oravel Stays Ltd, which runs Oyo, filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹8,430 crore through a stock market debut. The IPO consists of 83 per cent fresh issue of shares, while the balance 17 per cent will be an offer for sale by existing investors.
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SoftBank Group, an early investor in Oyo, holds an about 47 per cent stake in the company. The start-up’s founder Ritesh Agarwal holds around 33 per cent.
Key focus markets
Founded in 2012, Oyo has over 1,57,000 storefronts across more than 35 countries. On the consumer side, its app has been rated as the most downloaded accommodation app in Asia and third largest in the world in 2020 as per Sensor Tower, said a company statement.
“While Oyo has a global footprint, its core growth markets comprise India, Indonesia, Malaysia and Europe,” said the statement. “These are the most mature markets in terms of scale and unit economics.”
Over the past year, Oyo has implemented various measures as a part of its COVID response strategy, “including accelerated development and adoption of technology and products to reduce operating costs, and repositioning its offerings”.
The company said it also streamlined strategic and shared services functions, such as revenue management, supply, human resources, legal and finance, from country teams to regional teams to streamline processes, create more efficiencies and reduce costs.
Its adjusted gross profit margin improved from 9.7 per cent in FY20 to 33.2 per cent in FY21, along with an about 79 per cent reduction in EBITDA losses from FY20 to FY21 despite the pandemic, said the statement.
