NEW DELHI: Hospitality firm OYO is reportedly reducing its initial public offer (IPO) size as shares of new-age technology companies continue to crumble. According to a report, OYO could reduce its proposed IPO share sale by about two-thirds. The company, which initially had filed to go public in October 2021, has been delaying its much-anticipated share sale process because of turbulent market conditions where newly listed companies such as Paytm, Zomato and Nykaa witnessed massive corrections.
Queries sent to OYO on reducing its issue size were not answered till this report was published. Earlier in January this year, the SoftBank-backed firm was asked by market regulator Sebi to refile the draft IPO papers with certain updates.
The company, which planned to launch its IPO in the first half of CY2023, is likely to see a nominal delay in becoming a publicly listed company. In September 2021, OYO first filed preliminary documents with Sebi for a `8,430 crore IPO at a reported valuation of about $11 billion. The issue was then delayed as the company prepared itself to settle for lower valuations.
Meanwhile, OYO estimates its revenue in FY23 will be over Rs 5,700 crore, up 19% from Rs 4,780 crore it had recorded in FY22, as per its founder and Group CEO Ritesh Agarwal. At a town hall on Monday, Agarwal told employees that the hotel aggregator is aspiring to reach an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of nearly Rs 800 crore in the next financial year.
Agarwal added that sustained growth in India, Indonesia, the US, and the UK and relevant optimisation and synergies in its European vacation homes business, have led to better financials of the company. The 29-year-old entrepreneur outlined that the key focus areas for them in the calendar year 2023 will be on Profit After Tax (PAT) along with consistent momentum in EBITDA; achieving cash flow positive in FY24; cost efficiency and improving contribution margins and making storefront additions.
Listing in exchanges may see nominal delay
OYO, which planned to launch its IPO in first half of CY23, is likely to see a nominal delay in becoming a publicly listed company. In September 2021, OYO first filed preliminary documents with Sebi for a Rs 8,430 crore IPO at a reported valuation of about $11 billion