OYO Clocks Maiden Profitable Year In FY24

OYO's Acquisition Of Motel 6 To Take Its EBITDA Past INR 2,000 Cr Mark In FY26

SUMMARY

Founder Ritesh Agarwal said OYO logged its eighth straight quarter of positive EBITDA in Q4 FY24

The CEO also said that the SoftBank-backed startup’s cash reserves stood at nearly INR 1,000 Cr at the end of the year

OYO is looking to withdraw its draft red herring prospectus (DRHP) for its initial public offering and refile it after $450 Mn loan refinancing

Travel tech unicorn OYO reported its first full year of profitability in the financial year 2023-24 (FY24), posting a net profit of about INR 100 Cr, founder and CEO Ritesh Agarwal claimed.

Taking to social media platform X, Agarwal said OYO logged its eighth straight quarter of positive EBITDA in Q4 FY24. He added that the SoftBank-backed startup’s cash reserves stood at around INR 1,000 Cr at the end of the year.

While these are provisional estimates, Agarwal said that the audited numbers will be close to these.

The CEO said he is optimistic about OYO’s growth not only in India but also in key international markets such as the Scandinavian region, Southeast Asia, the US, and the UK.

The Shark Tank India judge also highlighted that global credit firm Fitch has upgraded OYO’s credit rating, owing to the firm’s improved performance and strong cash flows.

On May 27, Fitch upgraded the long-term foreign and local currency issuer default ratings of OYO parent Oravel Stays to ‘B’ from ‘B-‘ with a ‘stable’ outlook.

The upgrade was influenced by several factors such as OYO’s improved EBITDA, declining leverage, adequate liquidity and demand recovery in the travel and tourism industry in the company’s key markets in FY24.

The latest development comes at a time when OYO is looking to withdraw its draft red herring prospectus (DRHP) for its initial public offering and refile it after $450 Mn loan refinancing.

The startup is close to refinancing its high-cost Term Loan B by issuing fresh dollar bonds.

Earlier this month, it was also reported that OYO was in talks with some family offices to raise a funding of $80-90 Mn at a $2.3 Bn valuation, down 77% from its peak $10 Bn valuation in 2019.

Founded by Agarwal in 2012, OYO offers vacation homes, casino hotels, coworking spaces, budget hotels, corporate stays and more. As per Inc42 data, the startup has raised nearly $3.5 Bn in funding to date from marquee investors such as Microsoft, Red Lions Capital, JP Morgan Chase and Qatar Insurance Company.

In March, OYO said it was planning to launch 13 self-operated hotels under its premium brand ‘Palette’ by the end of 2024.

The company reported its second consecutive profitable quarter in Q3FY24, doubling its profit after tax to INR 30 Cr.