Oyo Rooms, the country's biggest hotel chain, has reported a total loss of Rs 2,384 crore for financial year ended March 2019 (FY19), which is six times more compared to last year. The increase in loss was attributed to rise in operating expenses and employee-related expenses.
The revenue, however, jumped by 4-fold to Rs 6,547 crore in FY19, compared to Rs 1,413 crore in previous financial year, as per a valuation report filed with the registrar of companies (RoC).
Ritesh Agarwal-led hospitality startup posted a five-time jump in its total expenditure at Rs 9,027.53 crore in FY19 compared with Rs 1,835.38 crore in FY18. Out of the total expenditure, operating expenses increased to Rs 6,131 crore, which also saw five-time rise compared to the previous year. The employee-related expenses jumped six-fold on the yearly basis to Rs 1,539 crore.
The ballooning losses may shatter OYO's initial public offering (IPO) dreams as the Indian hospitality unicorn has to show pre-tax operating profit for three years. As per SEBI norms, a company need to report three-years of consistent pre-tax operating profit for launching an IPO.
Oyo Rooms is reportedly planning for an IPO by 2022 at a hefty valuation of $18 billion. Currently, Oyo's auditor has pegged company's valuation at $5.32 billion as of June 2019. The enterprise value, an alternative to evaluate the value of a company based on the market capitalisation of its equity, total debt and cash, stood at $755.3 million, a leading daily Mint reported.
Founded in 2013 by Ritesh Agarwal, Oyo expanded globally with thousands of hotels, vacation homes and millions of rooms in hundreds of cities in India, Malaysia, UAE, China, UK, Japan, the United States and more. The company's investors include SoftBank Group, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, Airbnb and China Lodging Group.
Last month, Oyo opened 100 hotels in over 50 cities in Japan, including Tokyo, Osaka and Kyoto, in a joint venture with majority investor SoftBank Group Corp. Softbank has already invested nearly $1 billion in Oyo.
Edited by Chitranjan Kumar