Oyos Confidential IPO Filing Targets Up To $600 Million

Oyo aims to sell new shares to raise $400 million-$600 million ( ₹3,285 crore- ₹4,927 crore) to repay debt and hopes to list before Diwali, the people cited above said on the condition of anonymity. The company’s existing investors, who had planned to sell some of their shares as per the earlier draft, will not be selling their shares in the IPO.

In November 2022, the Securities and Exchange Board of India (Sebi) allowed so-called confidential filings, which would keep the financial data of companies private in case they choose to call off listing plans. Companies can also adjust the issue size upwards or downwards by 50% and enjoy an 18-month listing window after Sebi approval against the normal 12 months.

Oyo first filed draft papers for an IPO in September 2021 but did not receive regulatory approvals. In January this year, the regulator returned its papers and asked the company to refile them with additional information.

Oyo expects to record ₹2,800 crore revenue in the October-March 2023 period (H2FY23), a 15% increase over H2FY22, one of the two people cited above said. Its adjusted Ebitda for H2FY23 is expected to increase threefold from H2 FY22 to ₹185 crore, the person cited above said. Previously, the company had reported an adjusted Ebitda of ₹63 crore in H1 FY23, which brings it to an adjusted Ebitda of ₹248 crore for FY23.

Startups have been reporting Ebitda profitability on an “adjusted" level to avoid accounting for non-cash expenses such as employee stock option plans. Paytm also reported adjusted Ebitda profitability in February.

“For the full financial year 2023, Oyo’s revenue is expected to be over ₹5,700 crore, a growth of 19% from the ₹4,780 crore in FY22," the person cited above said.

In a town hall meeting on Monday, Oyo’s co-founder Ritesh Agarwal told employees that the company expects to make approximately ₹800 crore in adjusted Ebitda in FY24. He said the company had a cash balance of approximately ₹2,700 crore.

Growth in India, Indonesia, the US and UK and “relevant optimization as well as synergies in its European vacation homes business" was responsible for the rebound in financials, the person cited above added.

In September 2021, Oyo had filed to raise ₹8,430 crore in fresh capital, including an offer for sale by some of Oyo’s investors amounting to ₹1,430 crore.

SoftBank Group, which owns 46% of Oyo, initially planned to sell around 2% of the company in the IPO. Southeast Asian taxi-hailing app Grab, which invested $100 million in Oyo in 2018, proposed to sell about ₹51.6 crore worth of shares. HuaZhu Hotels or China Lodging Holdings, which invested in 2017, proposed to sell ₹23.13 crore, while the family office of Sunil Munjal planned to sell shares worth ₹26.71 crore. The offer-for-sale plan has now been dropped.

In September 2021, Oyo also said it planned to use the IPO proceeds of around ₹2,441 crore to repay the debt owed by its units, including Oravel Stays Singapore Pte Ltd, Oravel Hotels LLC and Oyo Hospitality Netherlands BV.