Oyo Hotels and Homes is shifting Aditya Ghosh, its chief executive for India and South Asia, to the board, ‘before a possible public listing, barely a year after he joined India’s second-most valuable internet firm. The transition in management comes as the SoftBank-backed company intensifies its focus on turning profitable before a public listing.
Ghosh, a former president of budget airline IndiGo, was appointed on 1 December 2018. He will be replaced by Rohit Kapoor, the head of New Real Estate Businesses, Oyo said on Monday.
The move appears intriguing as Ghosh, who attained corporate acclaim during his tenure with IndiGo, was courted by several other large startups before he joined Oyo. But Ghosh said that he decided to join the board so that he would have a bigger canvas than South Asia. Gurugram-based Oyo has been expanding to international markets such as China, US and UK over the past two years.
“Now that I have been in Oyo for a year, and the south Asia business has doubled in size, Ritesh and I have been discussing on how I could contribute on a global basis. The strategy is that we not only build a fast-growing company but also one which is well respected in terms of governance, brand recognition and also a financially sustainable business that’s profitable," Ghosh said in a telephonic interview.
On the company board, Ghosh will join Ritesh Agarwal, Oyo’s founder and Group CEO; Betsy Atkins, founder and CEO, Baja Corporation; Munish Varma, managing partner, SoftBank Vision Fund; Bejul Somaia, partner, Lightspeed India Partners Advisors; and Mohit Bhatnagar, managing director, Sequoia Capital India Advisor, among others.
In his new role, Ghosh will focus on five key areas such as safety and security, customer experience, corporate governance, revenue management and stakeholder communications.
Ghosh said Oyo will go public at some point though he didn’t specify a timeline.
“It is the job of the management team and board that the business is run in a way that it can be taken to an IPO and is ready for it. Higher governance, better financial stability, better processes and a strong board are all steps towards ultimately doing an IPO at some point of time," he said.
Last year, Oyo disclosed that it had raised $800 million from SoftBank’s Vision Fund, along with other existing investors such as Sequoia Capital, Lightspeed Venture Partners and Greenoaks Capital, besides a commitment to pump in an additional $200 million. At that time, the company was valued at nearly $5 billion, six times its 2017 valuation.
In July, Mint reported that Oyo Hotels and Homes is preparing for an IPO in the next two-three years.
However, following the debacle of his two top bets—Uber and WeWork, SoftBank chief executive Masayoshi Son is urging global and Indian companies in his portfolio to sharpen their focus on scale and profitability before launching initial public offerings (IPOs), Mint reported in October.
Oyo’s losses swelled more than sixfold to ₹2,384.69 crore in the fiscal year ended 31 March 2019, even as revenue jumped more than fourfold during the period, according to a valuation report filed with the Registrar of Companies (RoC) in November. The report prepared by Oyo’s valuer also pegged its post-money valuation at $5.32 billion ( ₹36,658 crore) as of June, while its enterprise value was $755.3 million in the same month. The valuation report was filed along with Oyo’s proposed plans to raise $1.5 billion in a fresh Series F funding round at a valuation of $10 billion, according to a company statement in October.