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Oyo reports 8x increase in EBIDTA, pre-IPO losses are small

IPO-bound global travel technology company Oyo has reported an eight-fold increase in Adjusted EBITDA 56 crore in its second-quarter financial results. The EBIDTA was at 7 crore in the first quarter.

The primary reason for the EBITA increase is a 23% monthly increase in monthly revenue per hotel, also known as gross booking value (GBV) per hotel per month, during the second quarter to around 4 lakhs. The monthly increase in GBV per hotel is due to improved occupancy and higher average room rates as travel returns, the company said.

In a supplement submitted to SEBI, Ritesh Agarwal-led Oravel Stays Ltd, which the company trades under the Oyo brand, reported smaller losses of 333 crore for the fourth from July to September, down from 414 crore in the previous quarter.

Oyo has submitted its second addendum to update its Draft Red Herring Prospectus (DRHP) with financial performance through the first half of fiscal year 2022-23.

The market regulator had given Oyo permission to provide updated financial data before reviewing and ultimately processing the company’s IPO application.

Oyo, which has advanced its IPO plans to next year, allows bookings from hotels, homestays and accommodation.

The results come after Oyo’s valuation in the private market fell to around $6.5 billion last month after reports suggested its investor SoftBank Group Corp had increased the valuation of Oyo Hotels on its books by more than 20 % lowered.

The Gurugram-based company aims to launch its initial public offering (IPO) in the first quarter of 2023 with a valuation of around $7 billion to $8 billion, compared to its original estimates of around $10 billion when the drafts were first filed.

In the second quarter of this fiscal year, Oyo reduced its marketing, administrative and personnel expenses.

Personnel expenses less stock-based compensation expenses represented the largest component on the cost side at 18% of revenue, followed by marketing expenses at 14% and general and administrative expenses at 7% of revenue for the first half of FY23, the company said.

In the first half of FY23, Oyo’s revenue increased 24% year-on-year 2,905 crore while Adjusted EBITDA improved to 63 crore profit from a loss of 280 crore in the first half of the previous fiscal year ended March 2022.

Einhorn Hospitality chain GBV for the six months ended September 2022 increased 68.7% year-on-year 3.48 lakh revived after the Covid-19 led pandemic. Total GBV increased by 33% 5,028 crore in H1 2022-23.

However, gross rents for European housing company Oyo remained flat, registering only a 4% increase due to inflation.

Founded in 2013 by then 20-year-old Agarwal, Oyo is a leading new-age technology platform empowering the vast global hospitality ecosystem.

The company says it is now focused on four main regions: India, Malaysia, Indonesia and Europe, where it manages vacation homes and has scaled back operations in markets it previously deemed crucial, such as the US and China.

In addition to SoftBank, other shareholders of Singapore-based Oyo Grab Holdings Inc., HuaZhu Hotels of China and the family office of Sunil Munjal of India’s Hero Group.

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