OYO IPO: 12 things to know about one of the most keenly awaited IPOs

by 5paisa Research Team Last Updated: Dec 13, 2022 - 01:52 am 51.4k Views
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Indian hotel booking startup Oyo Hotels and Homes, which upended the country’s hospitality industry in more ways than one, is set to go public with a Rs 8,430-crore initial public offering (IPO). 

Oravel Stays Ltd, the company that operates Oyo, will sell fresh shares worth Rs 7,000 crore in the IPO. The issue also includes an offer for sale of Rs 1,430 crore by SoftBank Vision Fund and some other shareholders. 

Here are 12 reasons why Oyo is by far one of the most keenly watched IPOs of 2021:

1. Oyo is set to mop up Rs 8,430 crore from investors, making this the second-biggest IPO this year. The biggest IPO this year was by another tech company, Zomato, which went public with a Rs 9,375-crore offering. 

2. Oyo founder Ritesh Agarwal is one of the youngest promoters of an Indian startup that has scaled so big and is going public. Moreover, Agrawal is a college dropout, who started up when he was not even 20 years old.

3. Oyo began life in 2012 as Oravel Stays, a budget accommodation portal. It was accepted by Venture Nursery into its accelerator programme the same year and received a $100,000-grant in 2013 as part of the Thiel Fellowship. 

4. Oyo Rooms was launched in May 2013. Five years later, in 2018, it raised $1 billion from a group of investors. 

5. In 2020, Agarwal’s net worth was estimated by the Hurun Rich list to be $1.1 billion.

6. Apart from founder Agarwal, the company is owned by at least 15 other shareholders. These include Japanese tech investment giant SoftBank, Lightspeed Venture Partners, Microsoft, Sequoia Capital, Airbnb, Grab and the Oravel Employee Welfare Trust.  

7. Agarwal, his holding company RA Hospital Holdings and SoftBank Vision Fund – the three largest shareholders – are the promoters, according to the draft red herring prospectus. SoftBank holds a 46.62% stake while Agarwal and his holding company own a combined 33% stake.   

8. Apart from India, Oyo operates its properties across 35 countries. Around 43% of its revenue comes from India and Southeast Asia while 28% is from Europe.

9. Of the fresh money being raised, Oyo will use Rs 2,441 crore to settle the debt owed by its subsidiaries that include Oravel Stays Singapore Pte Ltd, Oravel Hotels LLC and Oyo Hospitality Netherlands BV, Oyo Singapore and OHL.

10. The company has faced its share of controversies including allegations of fraud, backlash from Indian hoteliers, a $200,000 fine by California authorities for unauthorised activities and a cease-and-desist order from Washington. 

11. The company has also been hit hard by the coronavirus pandemic. For fiscal year 2020-21, its total income slumped to Rs 4,157 crore from Rs 13,413 crore the year before and Rs 6,518 crore in 2018-19.

12. Oyo is also deep in the red. Its net loss narrowed to Rs 3,944 crore for 2020-21 from Rs 13,123 crore the year before. However, this was likely because of the massive drop in revenue and expenses. The loss for 2020-21 is far greater than the loss of Rs 2,364 crore for 2018-19.

Also Read:- Oravel Stays (OYO) Files for Rs.8,430 Crore IPO

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