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Post Covid travel boom helps OYO revive its IPO plans

September 21, 2022
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  • The Gurugram-based company plans to raise £8,430m through an IPO.
  • OYO’s revamped efforts to raise money from the public come at a time when PE and VC investments have hit a 19-month low, according to the IVCA and E&Y.
  • Its updated DRHP with narrowing losses suggests it’s taking a new approach for investors to analyze the company and its upcoming IPO.

Global hospitality services platform OYO filed an addendum to its draft prospectus submitted last year to market regulator SEBI on September 19.

OYO, officially known as Oravel Stays, filed its IPO documents last year. However, it withdrew from launching the public offering due to pandemic impact and unpredictable market conditions. Its updated DRHP with narrowing losses shows it is taking a new approach for investors to analyze the company.

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The Gurugram-based company plans to raise £8,430m via an IPO – which will include a new issue of up to £7,000m and a £1,430m offer to sell.

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OYO’s revamped effort to raise money from the public comes at a time when private equity and venture capital investments in India plummeted over 80% to $2.2 billion in August. Investments are at a 19-month low, according to the report by industry association IVCA and consultancy EY.

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OYO’s updated DRHP shows its losses narrowed by a significant 85% decline to ₹1,939 billion in FY22 from ₹13,123 million in FY20. The company also posted positive EBITDA for the first quarter (April to June) of FY23.

Because after two erratic years, traveling is back in fashion. As a result, hotel operators are seeing a surge in occupancy as all forms of travel are back – whether vacation, wedding, conference, trade show or business travel.

details revenue Loss
FY22 ₹4,781 crores – 1,939 crores
FY21 ₹ 3,961 crores -₹3,944 crores
FY20 £13,168 billion – £13,123 million

OYO operates in four regions – India, Malaysia, Indonesia and Europe.

The hotel chain’s store count increased from 1.57 lakh as of March 31, 2021 to 1.68 lakh as of March 31, 2022, reflecting the growth of both its holiday homes and hotel business, mainly due to the recovery in travel demand.

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OYO gross book value increased by 22% to ₹8,100 billion in FY22 from ₹6,638 billion in FY21 on the recovery in travel demand and the easing of travel and domestic movement restrictions.

Looking ahead, the travel and tourism industry is forecast to grow at a CAGR of 6.6% from 2021 to 2030 and reach $1.9 trillion in 2030, according to the DRHP.

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