Oyo's Private Market Value Drops To Around $6.5 Billion

After reports that SoftBank Group had reduced the value of Oyo Hotels on its books by more than 20%, the private market valuation of Oyo, which is set to go public, dropped to about $6.5 billion.

Oyo revealed its most recent financial data in a supplement to its IPO filing last month. The figures showed reduced losses and an increase in sales for the fiscal year that ends in March 2022 and the next three months.

The sources claim that Oyo's share price increased to Rs 94 per share on the private market; but, in the days that followed news of SoftBank's reduction of OYO's valuation, the company's valuation fell by about 13% to Rs 81 per share.

For the fiscal year that ends in March 2022, the company's losses were almost cut in half. In the fiscal year 2022, Oyo's operational income climbed by 21% to Rs 4,781.4 crore from Rs 3,961.6 crore the previous year.

The company's adjusted gross profit margin grew from 9.7% in fiscal 2020 to 33.2 in fiscal 2021, and its EBITDA losses decreased by roughly 79% over those two fiscal years. EBITDA continued to decline during the first quarter of the current fiscal year and recorded its first positive number.

When OYO submitted the draught prospectus for its first public offering, it sought a valuation of over $10 billion, but eventually was ready to accept for a lesser price of about $7-8 billion.

In October of last year, Oyo filed its draught red herring prospectus (DRHP) for its first public offering (IPO). The intended offering, according to the company's DRHP, included an offer for sale for Rs 1,430 crore and a fresh issue of equity shares for up to Rs 7,000 crore.

In 2012, Ritesh Agarwal launched Oyo, formerly known as Oravel Stays. The firm is now aiming for an initial share sale in early 2023, according to a report, assuming that India's stock market holds up and the nation's economic position improves.