Travel-tech startup OYO Hotels is reviving its plans to launch its initial public offering (IPO), which was supposed to open this year, as it reduces its losses through cost-cutting measures and a recovering travel industry post-pandemic. The SoftBank-backed company filed fresh financial documents with markets regulator Sebi on Monday as it aims for an early 2023 IPO launch.
As per a report by Bloomberg, OYO IPO launch in 2023 will only take shape if the country’s stock market continues to perform smoothly up and economic conditions improve. Sources quoted by the news agency said Oravel Stays Ltd. is working toward a January IPO internally as company executives are excited about business pickup this year.
OYO had filed for its draft IPO papers in 2021 with the Sebi, and had thereafter received an in-principle nod from BSE and NSE to launch the offer. The OYO IPO consisted of a fresh issue of shares of up to Rs 7,000 crore and an offer-for-sale of as much as Rs 1,430 crore at the time, as per the DHRP. However, that plan could not be realised as waves after waves of the Covid-19 pandemic hit India hard, thereby hurting the company’s growth that resulted in a layoff of thousands of employees.
In the addendum to the OYO IPO DHRP on Monday, the company disclosed its latest financials where the numbers showed narrower losses and a rebound in sales for the year through March 2022 and the following three months. OYO’s adjusted gross profit margin improved from 9.7 per cent in fiscal 2020 to 33.2 per cent in fiscal 2021. Meanwhile, EBIDTA losses reduced by approximately 79 per cent though fiscal 2020 to 2021, as the company’s revenue from operations increased 21 per cent to Rs 4,781.4 crore in financial year 2022 from Rs 3,961.6 crore in 2021.
The company in its DHRP had said the proceeds from the OYO IPO will be utilised for prepayment or repayment, in part, of certain borrowings availed by its subsidiaries, funding organic and inorganic growth initiatives, and general coporate purposes.
The company has appointed Kotak Mahindra Capital, Citigroup, ICICI Securities, Nomura and Bank of America as lead book managers for the public issue, the business daily Mint reported.
The OYO Hotels and Rooms made huge strides after 2013,. After 8 years of establishment in India, the company operates in 800 cities in more than 80 countries of the world. The company started its international operations in 2018 starting with Malaysia. It then entered into the markets of the UK, UAE, Dubai, China, Singapore, Indonesia, and others.In 2018, the company became a 100 per cent leased and franchised hotel chain.