OYO IPO Overview
OYO (Oravel Stays Limited), the well-known hospitality tech startup, is gearing up for its much-anticipated Initial Public Offering (IPO). The company, which has disrupted the budget hotel segment in India and expanded globally, is planning to raise Rs 8,430 crore through this public issue. The IPO consists of a fresh issue of Rs 7,000 crore and an Offer for Sale (OFS) of Rs 1,430 crore by existing shareholders, including SVF India Holdings Limited and A1 Holdings Inc.
OYO’s IPO is expected to be a major event in the Indian stock market, with investors eagerly looking forward to the listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Key Dates, Issue Size, and Other Details
Important IPO Dates
- IPO Open Date: Expected in the first week of March 2025
- IPO Close Date: Expected in the first week of March 2025
- Basis of Allotment: Yet to be announced
- Initiation of Refunds: Yet to be announced
- Credit of Shares to Demat: Yet to be announced
- Listing Date: Expected in the second week of March 2025
IPO Details
- Total Issue Size: Rs 8,430 crore
- Fresh Issue: Rs 7,000 crore
- Offer for Sale: Rs 1,430 crore
- Face Value: Rs 1 per share
- Price Band: Expected around Rs 58 per share
- Lot Size: Expected 255 shares
- Issue Type: Book Built Issue IPO
- Listing At: BSE, NSE
About OYO
Founded in 2012 by Ritesh Agarwal as Oravel Stays, OYO has revolutionized the fragmented budget hospitality sector. It provides a platform for hotel and property owners (Patrons) to transform their unbranded properties into OYO-branded accommodations. By leveraging technology, OYO optimizes occupancy, enhances the customer experience, and increases revenue potential for its Patrons.
As of March 31, 2021, OYO had a network of 157,344 storefronts across more than 35 countries, making it one of the largest players in India, Southeast Asia, and Europe. The company operates on a two-sided technology platform, catering to both Patrons and customers by offering digitally integrated solutions for seamless short-stay experiences.
Objectives of the OYO IPO
The proceeds from the IPO will be utilized for:
- Repayment or prepayment of debts taken by OYO’s subsidiaries to reduce financial liabilities.
- Supporting organic and inorganic growth initiatives, including expansion and technology development.
- General corporate purposes, ensuring financial stability and future growth.
- Offer for Sale (OFS) to allow existing investors to exit or reduce their holdings.
Why Should You Consider Investing in OYO IPO?
Strengths of OYO
- Global Expansion & Market Leadership: OYO has successfully established itself in more than 35 countries, including India, Southeast Asia, the USA, and Europe, making it one of the largest hotel chains in the world.
- Strong Brand Recognition: OYO remains a strong player in the budget hospitality segment, with a well-known brand presence and high customer recall.
- Microsoft Partnership: OYO has partnered with Microsoft to develop a cloud-based SaaS system, enabling better efficiency for small hotels and improving its technology platform.
- High Repeat Business: Around 90.3% of OYO’s demand in India comes from repeat and organic customers, demonstrating strong customer retention.
- Improved Financials: The company has significantly reduced its Adjusted EBITDA losses and improved profit margins in the last fiscal year.
Risks and Challenges
- Increasing Competition: New players are entering the budget hotel segment, posing a challenge to OYO’s dominance.
- Revenue Share Disputes: OYO has faced legal disputes with hotel owners over revenue-sharing agreements, impacting its reputation and operations.
- Low Profit Margins: Given its focus on budget stays, OYO’s profit margins have remained low compared to premium hospitality brands.
- Dependence on Market Conditions: The hospitality industry is vulnerable to economic downturns, pandemics, and travel restrictions, which can impact OYO’s business.
OYO IPO Financials
Here’s a look at OYO’s financial performance over the past three years:
| Financial Year | Profit After Tax (Rs. Cr.) | Total Assets (Rs. Cr.) | Total Income (Rs. Cr.) | Total Expenses (Rs. Cr.) |
| March 2021 | 39,438.44 | 87,510.48 | 41,573.86 | 69,360.75 |
| March 2020 | 1,31,227.77 | 1,41,089.82 | 1,34,132.68 | 2,28,001.20 |
| March 2019 | 23,645.32 | 1,17,426.08 | 65,184.57 | 88,094.28 |
Book Running Lead Managers & Registrar
The IPO will be managed by the following book-running lead managers:
- ICICI Securities Limited
- Kotak Mahindra Capital Company Limited
- JM Financial Limited
- Citigroup Global Markets India Private Limited
- J.P. Morgan India Private Limited
- Deutsche Equities India Private Limited
- Nomura Financial Advisory and Securities (India) Private Limited
Registrar: Link Intime India Private Limited
Final Thoughts on OYO IPO
OYO’s IPO is expected to attract strong investor interest due to its market dominance, global expansion, and technology-driven business model. While the company has faced challenges in the past, including financial struggles during the pandemic, it has shown signs of recovery with improved profitability and strategic partnerships.
However, potential investors should weigh the opportunities and risks carefully before making an investment decision. The IPO’s success will depend on its valuation, market sentiment, and OYO’s ability to sustain growth in a competitive hospitality industry.
With its listing expected in March 2025, OYO’s IPO will be one to watch closely!
