OYO IPO Preparation: Hotel booking app OYO Hotels & Homes has filed for IPO with market regulator SEBI. The company will raise Rs 8,430 crore through this IPO. Oyo is on the list of unicorns. Unicorn means a company with a valuation of more than $1 billion. Orawell, which runs the OYO brand, will be listed on the exchange.
Merchant Bankers Appointment Last Week
OYO had appointed merchant bankers only last week. Merchant bankers include Kotak Mahindra Capital, Citigroup, ICICI Securities, Nomura and Bank of America. The company will raise Rs 7,000 crore through new shares. The rest of the money will be raised through secondary shares or through sale of shares by existing shareholders. The valuation of Oyo is being estimated at $ 9 billion i.e. about Rs 67 thousand crores. It is the third highest valuation startup in India.
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2,441 Crore Debt Involved
The proceeds of the issue will be used for repayment, including Rs 2,441 crore of debt taken by OYO’s subsidiaries. Apart from this, the money raised from the IPO will be used for business expansion and general corporate purpose.
Microsoft Invested Money
Let us tell you that Microsoft Corporation of India has invested $ 5 million (about Rs 37 crore) in Oyo. The investment has been made through private allotment of equity shares and compulsorily convertible cumulative preference shares. Hospitality sector company Oyo had said this in a regulatory notice. OYO IPO Preparation.
There are Three Major Shareholders
Its founder is Ritesh Agarwal. In this, the three major shareholders are R.A. Hospital, SoftBank Vision and Ritesh Agarwal himself. SoftBank holds a 46% stake. Ritesh Agarwal and his company R.A. The hospital holds 33% shares. The company’s shares can be listed on the stock exchange by the end of November or early December. That is, the IPO can come during this time.
Approval May Take up to Two Months
SEBI takes 2 months for any IPO. In some cases, approval is also given within a month. Oyo was started by Ritesh Agarwal in 2013. College dropout Ritesh Agarwal is currently 27 years old. In 2019, Ritesh Agarwal had invested $2 billion. He had borrowed this money. Because of this his stake in Oyo increased three times.
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India, Malaysia, Indonesia and Europe contribute more than 90% of OYO’s business. Oyo’s app has been downloaded 100 million times. It has more than 90 lakh customers.
India’s Largest Hotel Chain with 68% Market Share
OYO Rooms is currently the largest hotel chain in India with a market share of 68%. Its competitors include Air BnB, Yatra, Fab Hotels, Cleartrip, Booking.com, Treebo and MakeMyTrip. For future OYO has done multi business expansion. Like- Oyo Townhall, Oyo Weddings, Oyo Workspace. Ritesh Aggarwal believes that all these are business related to hospitality.
43% of Oyo’s Revenue Comes from India and Southeast Asia
At present, 43% of Oyo’s revenue comes from India and South East Asia. 28% of revenue comes from Europe. The rest of the revenue comes from other countries. Due to Corona, it had drastically cut down its operations in China and America. OYO has tied up with 43 thousand hotels in 80 countries. Apart from this, there are 1.50 lakh vacation homes. It has countries like India, China, Malaysia, Thailand, Indonesia and Nepal. So far this year, companies have raised Rs 78 thousand crore from IPO.
Persistent Loss Company
The company had a loss of Rs 3,943 crore in the financial year ended 31 March 2021. There was a loss of Rs 13,122 crore a year ago. The company had spent Rs 542 crore on marketing and promotion at the time of Corona. The company said that since its inception, till date, it has been in loss every year.