Oyo reports 8x rise in EBIDTA, losses narrow ahead of IPO

Bengaluru:

IPO-bound global travel-tech firm Oyo has reported an eight times rise in adjusted EBITDA at ₹56 crore in its second quarter financial results. The EBIDTA was at ₹7 crore in the first quarter.

The primary driver for the EBIDTA rise is a 23% monthly rise in monthly revenue per hotel, also called Gross Booking Value (GBV) per hotel per month, during Q2 to around ₹4 lakh. The monthly increase in GBV per hotel is due to improved occupancy and higher average room rents as travel returns, the company said.

In an addendum submitted to SEBI, Ritesh Agarwal-led Oravel Stays Ltd, which runs the company under the Oyo brand, reported narrowed losses of ₹333 crore during the July to September quarter, down from ₹414 crore in the previous quarter.

Oyo filed its second addendum to update its Draft Red Herring Prospectus (DRHP) with the financial performance till the first half of FY2022-23.

The markets regulator had given Oyo the permission to submit updated financials before it examined and finally processed the company’s IPO application.

Oyo, which pushed its plans to go public to next year, facilitates hotels, homestays and lodging bookings.

The results come after Oyo’s valuation in the private market last month dipped to around $6.5 billion, following reports that suggested that its investor SoftBank Group Corp has slashed the valuation of Oyo Hotels on its books by more than 20%.

The Gurugram-based company aims to launch its initial public offering (IPO) in the first quarter of 2023 looking at a valuation of around $7-8 billion, down from its initial estimates of around $10 billion when it first filed the draft papers.

During the second quarter of this fiscal year, Oyo has reduced its marketing, administrative and employee costs.

Employee expenses net of share-based payment expenses constituted the largest component on the cost side, at 18% of the revenues, followed by marketing expenses at 14% and general and admin expenses at 7% of the revenues for H1 FY23, the company said.

For H1 FY23, Oyo’s revenues increased by 24% year-on-year to ₹2,905 crore while the adjusted EBITDA improved to ₹63 crore profit from a loss of ₹280 crore in the first half of the previous financial year ending March 2022.

The unicorn hospitality chain’s GBV for the half year ended September 2022 increased by 68.7% year on year to ₹3.48 lakh, revived after the Covid-19-led pandemic. The total GBV grew 33% to ₹5,028 crore in H1 2022-23.

However, the gross rentals for Oyo European homes business stayed stagnant showing just a 4% increase impacted by inflation.

Founded in 2013 by then-20-year-old Agarwal, Oyo is a leading new-age technology platform empowering the large global hospitality ecosystem.

The firm says it now focuses on four main regions: India, Malaysia, Indonesia and Europe, where it manages vacation homes and has cut down operations in markets it previously considered crucial, such as the US and China.

Besides SoftBank, Oyo’s other shareholders include Singapore’s Grab Holdings Inc., China’s HuaZhu Hotels and the family office of Sunil Munjal of India’s Hero Group.