November 25, 2022

IPO Bound OYO Valuation Dips: The valuation of hospitality and travel tech firm OYO, which is preparing to launch its initial public offering (IPO), has fallen to around $650 million in the private market. In the week ended September 30th this year, about 12.3 lakh shares of the company were sold in the private market, as against 1.6 lakh shares sold in the previous week.

A source close to the private bank said that investors started selling shares of OYO after its largest investor, SoftBank, reduced the valuation of the company by 20 percent in its private book to $270 million. Due to this, after the financial report of OYO last month, the value of the company’s shares in the private market had increased to Rs 94 per share.

Investors sold the company shares. 
Investors started selling shares after SoftBank’s undervalued OYO, which led to a fall of nearly 13 per cent in the valuation to Rs 81 per share. OYO told the stock exchanges last month that it had received revenue of Rs 1,459.32 crore in the three-month period ending June 30, 2022.

loss-making company 
OYO’s loss stood at Rs 413.87 crore for the 3-month period ended June 30, 2022. It had reported a loss of Rs 1,939.8 crore in the financial year ended March 31, 2022. OYO said its total number of “storefronts” stood at 1,68,012 for the quarter ended June 30, 2022, up from 1,68,639 as of March 31, 2022. Due to a decrease in the number of hotels by 12,668, the number of storefronts decreased by 17,994 on a quarterly basis.

8430 crore IPO scheme 
The company had filed draught documents with SEBI in October last year to raise Rs. 8430 crore through an IPO. When the company submitted the documents to SEBI, its valuation was revealed to be $1 billion. However, it later settled and began to appear at around 700 million to 800 million dollars. 

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