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Oyo revives IPO plans, reveals its revenue and cost drivers in documents submitted to SEBI

Oyo revives IPO plans, reveals its revenue and cost drivers in documents submitted to SEBI

Oyo’s parent company, Oravel Stays Private Limited, submitted fresh documents to SEBI revealing that while its storefronts are key revenue drivers, employee benefits and marketing expenses are its major expenses.

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Hospitality startup, Oyo, is back in the market to revive its IPO plans. The company has filed an addendum to its Draft Red Herring Prospectus submitted to the Securities and Exchange Board of India (SEBI) in September last year. 

In the addendum, the company revealed its financials for FY20, FY21 and FY22. It also revealed financials for the ongoing fiscal year as well. Oravel Stays Private Limited, the parent company which owns OYO has three revenue generating streams as part of its business model - hotels, homes, and the listings business. 

Additionally, the company counted the increase in the number of storefronts as one of its key revenue drivers. The company attributed its acquisition of European vacation homes and its listings business- for the same. While the Gross Booking Value (GBV) decreased in FY21 as compared to FY20 due to the COVID-19 pandemic, it increased again in FY22 from FY21 because of recovery in the travel segment.

The data also noted that its revenue from contracts with customers declined by 69.9 percent from Rs 131,681.52 million in FY20 to Rs 39,616.49 million in FY21 but increased to Rs 47,813.62 million in FY22. 

The company made an adjusted gross profit of Rs 19,159 million in FY22 (up from Rs 13,137 million in FY21) and for the first quarter of FY23, it made an AGP of Rs 6,022 million. 

The company in its addendum has also written that it sees employee benefits expenses, marketing and promotion expenses and general and administrative expenses as the major cost drivers. 

According to the company’s financials, the marketing and promotion expenses declined in FY21 (Rs 5,427 million) from FY20 (Rs 18,797 million). However, they rose again in FY22 standing at Rs 6,902 million.

Similarly, the employee benefit expenses stood at Rs 18,618 million in FY22, seven per cent more than FY21 and it closed the first quarter of FY23 at Rs 5,412 million.

The COVID-19 pandemic played a spoilsport to the company’s stock market listing plans which were in progress last year. However, with both the economy and the travel industry almost revived, the company seems ready to go ahead. 

The company's proposed issue comprised a fresh issue of equity shares aggregating up to Rs 7,000 crore and an offer for sale to the tune of Rs 1,430 crore, as per its DRHP. The company was founded in 2012 by Ritesh Agarwal. The company is preparing to make its debut at the stock market in 2023, according to a Bloomberg report.