2 min read.Updated: 25 Nov 2019, 11:40 PM ISTSalman SH
Oyo is currently preparing for an IPO in the next two to three years at a hefty valuation of $18 bn
But, as per norms, a firm has to return pre-tax operating profit for 3 years for a direct listing
Hospitality startup Oyo Hotels and Homes’ 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, signalling that the six-year-old startup may have a long way off from an initial share sale.
Revenue climbed to ₹6,457 crore in FY19 from ₹1,413 crore in the previous year, according to a valuation report filed with the Registrar of Companies (RoC) last week and reviewed by Mint. Total expenditure at Oyo surged nearly fivefold to ₹9,027.53 crore in FY19 from ₹1,835.38 crore reported a year ago.
A majority of Oyo’s expenses is attributed to “operational expenses", which ballooned to ₹6,131.65 crore in FY19, a fivefold increase from the previous year. Oyo also spent ₹1,539 crore in employee-related expenses in FY19, a sixfold rise from FY18.
Mint reported in July that Oyo is preparing for an initial public offering (IPO) in the next two to three years at a valuation of $18 billion. However, as per listing norms in India, a company has to return pre-tax operating profit for at least three years for a direct listing. The other available route for listing in India is through the Securities and Exchange Board of India-regulated Innovator’s Growth Platform meant for small and medium enterprises and startups.
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. Enterprise value is an alternative to computing the value of a firm based on the market capitalization of its equity, total debt and cash.
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.
As part of the round, RA Hospitality Holdings will infuse nearly $700 million as primary capital in the company, with other existing investors contributing $800 million. The fundraising is the largest for a unicorn in India since SoftBank invested $2.5 billion in Flipkart in 2017.
“The numbers referred to in the story are not yet audited financials. They are based on a valuation report prepared by Oyo’s valuers and includes certain provisional financials for FY19. The valuation parameters such as share prices are based on fair market value and are not reflective of the share premium price. The final audited financials will be issued later by the company along with the annual report that we issue every year and filed with the RoC as well," an Oyo spokesperson said in an emailed statement.