India: Hospitality chain OYO is reportedly ready to resurrect its plans to debut on the stock market through an initial public offering [IPO] by as early as January 2023.
The startup, valued most recently at $9 billion, submitted fresh financial documents on Monday, 12 months after the company first filed to go public last September with a Draft Red Herring Prospectus [DRHP] for a $1.1 billion IPO. Earlier this year, OYO received regulatory approval to submit additional documents in order to go public.
Despite that, the prolonged effects of the pandemic forced the chain to halt its proposed stock market debut earlier this year, after cutting “thousands” of jobs and transitioning to an “asset-light” business model during Covid-related lockdowns.
After cutting down significantly on costs, OYO reported its first EBITDA positive quarter for Q1 of this year in a sign of a travel rebound. During that time, its adjusted earnings before interest, taxes, depreciation and amortisation stood at 72.66 million Indian rupees [over $911,000].
OYO saw annual losses shrink by almost 50 per cent to 18.9 billion rupees [$237 million] through to March, while revenue from contracts with customers over the same fiscal year grew by 21 per cent to 47.8 billion rupees [$597 million] to get closer to pre-pandemic levels.
If the Indian stock market continues its recovery and economic conditions improve, people familiar with the matter told Bloomberg that OYO would look to finalise its IPO in early 2023.
Launched in 2013, OYO has slimmed down its operations in markets such as the United States, Japan and China, and is instead targeting growth regions such as India, Malaysia, Indonesia and Europe, where the chain runs its Vacation Homes business.
In 2022 so far, OYO Vacation Homes has completed the acquisition of Croatian vacation rental franchise agency Direct Booker in a $5.5 million transaction and Nordic-based holiday home operator Bornholmske Feriehuse through its subsidiary Danish rental brand DanCenter for an undisclosed sum.
Japanese conglomerate SoftBank holds an estimated 47 per cent stake in OYO, while Agarwal owns approximately one third. The future of SoftBank’s involvement is unclear though, after reporting a record quarterly loss of $23 billion in August and selling its remaining stake in ride-sharing app Uber.