IPO-Bound OYO valuation drops in private request

October 6, 2022

Around two weeks after OYO refuted claims of SoftBank reportedly lowering its valuation, the IPO- bound company’s valuation in the private request has dropped to around $6.5 billion, news agency PTI reported citing assiduity players.

On September 22, Bloomberg reported that Softbank — OYO’s largest investor — had lowered the hospitality and trip tech company’s valuation by over 20 to roughly $2.7 billion on its private books after benchmarking OYO against peers with analogous operations. OYO had, still, rejected the cheapie, nominating it “patently incorrect”.

The company had said its fiscal results had “dramatically bettered” and saw no reason for the lowered valuation. The hostel aggregator’s profit from operations during the April- June period stood at Rs 1,459.3 crore, while losses were at Rs 414 crore. That quarter (Q1FY23) was also the company’s demoiselle earnings before interest, levies, depreciation and amortization (Ebitda) quarter at Rs 7 crore.

In fiscal time (FY) 2022, with the lifting of Covid- led restrictions, its profit from operations went up 20.7% to Rs 4,781.4 crore and losses narrowed to Rs2,140 crore from Rs4,103 crore in FY21, the addendum to its draft red herring prospectus (DRHP) filed before with the Securities and exchange board of India (Sebi) showed.

After the company showed its losses had narrowed and reported an Ebitda-positive quarter, the company’s share price in the private request had risen to Rs 94 per share. But following SoftBank’s reported rent in valuation, OYO’s shares vended off in the unrecorded requests and the share price fell by 13% to Rs 81 all. In the week ended September 30, nearly 1.23 million shares of the company were vended in the private request compared with over 0.16 million vended in the former week, the PTI report added.

“Last time, deals (of OYO shares) in private requests happed at around $8 billion range, but in the recent history deals are passing up to $6.5 billion valuation,” Analah Capital CEO and author Vaishali Dhankani said. Dhankani, who’s also the CEO ofTradeunlisted.com, a tech- grounded distribution platform for private equity, said some of OYO’s “once distractions feel to have gone down and one anticipates a stronger nethermost line and sticking to its knitting”.

These developments come at a time when OYO has been readying itself for an IPO, likely for early coming time. The company had filed its primary papers with Sebi to raise Rs8,430 crore through an original share trade in October 2021. When it filed the draft prospectus for its IPO, OYO was eying a valuation of around $10 billion but latterly prepared to settle for a lower valuation of around $7- 8 billion.

About OYO (Oravel Stays Private Limited)

Our Mission

OYO is a global platform that empowers entrepreneurs and small businesses with hotels and homes by providing full stack technology that increases earnings and eases operations. Bringing affordable and trusted accommodation that guests can book instantly. We strive to make the lives of our patrons easier by multiplying revenue channels and using our technological expertise to maximize demand.

What We Do

OYO is a global platform that empowers entrepreneurs and small businesses with hotels and homes by providing full-stack technology that increases revenue and eases operations; bringing easy-to-book, affordable, and trusted accommodation to customers around the world. OYO offers 40+ integrated products and solutions to patrons who operate over 157,000 hotel and home storefronts across India, Europe, and Southeast Asia and 35 countries. Oravel Stays Limited (formerly known as Oravel Stays Private Limited).