Connect with us


Why Oyo postponed its IPO?



According to sources, Oyo Hotels is postponing its planned IPO in 2022 due to a market slump that would affect its valuation. Oravel Stays Ltd, the parent company of OYO, has written to stock market regulator Sebi to modify its financials as it prepares to postpone its initial public offering beyond September.

When OYO decided to go public, it aimed for an $11 billion value. However, the Ritesh Agarwal-led business is now apparently willing to accept a $7-8 billion price. According to the sources, the board of Oyo, discussed a modification in the timing of the offering during numerous meetings last week and early this week after talking with its bankers and investors. If the company restarts the process before the end of the year, an IPO might happen as early as 2023.

The news comes at a time when India’s hotel industry is slowly emerging from the effects of the epidemic. According to a JLL analysis, revenue per available room (RevPAR) increased in all six main Indian markets – Bengaluru, Chennai, Delhi, Goa, Hyderabad, and Mumbai – in Q1 2022 compared to Q1 2021, owing to a solid rebound in leisure and business travel.

OYO’s overall income plummeted nearly 70% in FY21 to INR 4,157.38 Cr from INR 13,413.26 Cr the previous financial year due to pandemic-related lockdowns. According to the sources, OYO expects to boost its statistics in the April-September period as the market recovers. On the supply side, the overall number of registrations in the March quarter of 2022 was 56 hotels with 3,739 keys, increasing 81.2 per cent from the same quarter the previous year. OYO purchased Direct Booker for $5.5 million earlier this month to expand its European reach.

Oyo has yet to get a response to its request from the securities regulator, but indications are that it will get an answer either late this week or next week. Oyo filed its preliminary paperwork, the so-called Draft Red Herring Prospectus or DRHP, for a $1.1 billion IPO in September of last year, and the IPO has remained unapproved for nearly eight months.

Read more brand NewsStories, and market analysis on various industries from automobiles to fashion at Brandz Watch | Follow us on Twitter & Youtube


Editor's Pick

Would love your thoughts, please comment.x