OYO Execs Meet SEBI Officials To Fast Track IPO Approval

Hospitality unicorn OYO’s lead bankers and senior executives reportedly met the officials of the Securities and Exchange Board of India (SEBI) to provide an update on its business performance and address any outstanding concerns as the company aims to fast track its initial public offering (IPO) approval.

As per an ET report, OYO officials informed the regulator about a partial prepayment of $200 Mn of the company’s outstanding Term Loan B.

The report further said that they presented updates on the improvement in the company’s bottom line and other financial parameters over the past four quarters.

However, OYO rejected the report and called it a rumour. 

The development comes almost a year after OYO, operated by Oravel Stays, pre-filed a draft red herring prospectus (DRHP) with SEBI, reducing the issue size for the company’s public listing to almost half in tune with the changed realities.

The DRHP was filed under the confidential pre-filing route with a reduced issue size of $400-600 Mn from $1.2 Bn earlier. However, since then there hasn’t been any update on a final DRHP.

In tandem with the current market sentiment, OYO doubled down on its profitability strategy since last year as it was eyeing an IPO. As per its FY23 filing, the unicorn’s net loss declined 34% year-on-year (YoY) to INR 1,286.5 Cr in the reported fiscal.

In Q2 FY24, OYO posted its maiden profitable quarter with a PAT of over INR 16 Cr. Further strengthening its fundamentals, it posted a second consecutive profitable quarter in Q3 FY24, with PAT doubling to INR 30 Cr.

On the other hand, OYO prepaid nearly a third of its outstanding TLB, around INR 1,620 Cr ($195 Mn), via a debt buyback process. 

Recently, OYO has also been in talks with Malaysian sovereign wealth fund Khazanah Nasional Berhad seeking to raise funding of close to $400 Mn.

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