OYO posts R333 cr loss in Q2, plans IPO in Q1 2023

NEW DELHI, NOV 27: Softbank-backed Oyo Hotels reported that its July-September quarter (Q2FY23) loss has narrowed by 20% to R333 crore from R414 crore in the previous quarter of the ongoing fiscal (Q1FY23).In its updated Draft Red Herring Prospectus (DRHP) filed with the market regulator Sebi, Oyo informed that its EBITDA (Earnings before interest, taxes, depreciation, and amortization) grew 8 times to R56 crore in Q2FY23 from R7 crore in Q2FY23.

As per a source close to the company, Oyo now needs to show another quarter of growing EBITDA for the market to start judging if this performance trajectory is sustainable. “This will be the most important parameter if the company does decide to launch its IPO in the first quarter of 2023,” the source said. Oyo’s revenues in the first half of FY23 grew by 24% Y-o-Y to R2,905 crore. The Adj EBITDA improved from a loss of R 280 crore in H1 of FY22, to a profit of R63 crore in the latest half-year reported.

The fresh filing by Oyo again sets in motion the process of Sebi approval of its long pending IPO. Oyo had first filed to go public in October 2021, but the process had been delayed due to different reasons. This buoyancy by Oyo comes at a time when most start-ups are delaying their share sale process following huge deterioration in value of new-age companies such as Paytm, Zomato, Delhivery and Nykaa in the stock exchanges. 

Like many other new-age companies, Oyo is also a loss-making enterprise and there is significant curiosity around the valuation it would seek in the public market. Oyo’s loss for the full financial year 2022 came in at R2,140 crore as against R4,103 crore in the previous fiscal (FY21). Among other key highlights, Oyo’s monthly revenue per hotel, called Gross Booking Value (GBV) per hotel per month, increased by 69% Y-o-Y to R3.48 lakh. The total GBV grew 33% to R5,028 crore in H1 FY23.

-TNIE