Oyo IPO

About Oyo IPO

The IPO of Oyo comprises entirely of a fresh issue of shares by the company. As per the Confidential DRHP filed by PRISM (the parent company of OYO) with SEBI, the proposed will comprise of a fresh issue of shares worth ₹6,650 crores with no offer for sale portion. The total issue size is pegged at ₹6,650 crores; reduced from the earlier proposed size of ₹8,430 crore. It’s 100% book-built issue.

The price band is TBA. The IPO opens on TBA and closes on TBA. The listing date is on TBA and the allotment date is TBA. The credit of shares to the Demat account will take place on TBA, while the initiation of refund will take place on TBA.

Oyo is a leading, new-age technology platform empowering the large yet highly fragmented global hospitality ecosystem, according to Redseer. It has been focused on reshaping the short-stay accommodation space since its incorporation in 2012. For Q1FY26 quarter, OYO reported net sales revenues of ₹2,019 crore and net profits of ₹200 crore. The IPO filing reportedly values the company at approximately $8 billion or around ₹75,000 crore.

Objectives of Oyo IPO

The company proposes to utilise the IPO proceeds for:

• Prepayment or repayment, in part, of certain borrowings availed by certain of its subsidiaries
  
• Funding organic and inorganic growth initiatives
  
• General corporate purposes
  
• The company also seeks to get the benefit of listing the stock, which will offer an objective secondary market for the holders of shares
  

Industry Outlook

Within the travel and tourism industry, the short-stay accommodation market is one of the fastest growing segments. The short-stay accommodation segment refers to stays of up to one month, and the market comprises stays across hotels, homes, guesthouses, bed & breakfasts and campsites for tourists and travellers.

From 2015 to 2019, the total short-stay accommodation market grew at 7.5% CAGR to reach around US$ 1.3 trillion in 2019. While the industry dipped in 2020 due to COVID-19 restrictions, it is projected to revive back and reach US$1.1 trillion in 2021. Going forward, the industry is projected to grow at 6.6% CAGR from 2021 to 2030 to reach US$1.9 trillion in 2030. Also, it is projected that India will be one of the fastest growing short-stay accommodation markets globally, growing at ~13% annually between 2021 and 2025.

Company Information

Oyo is a leading, new-age technology platform empowering the large yet highly fragmented global hospitality ecosystem, according to Redseer. It has been focused on reshaping the short-stay accommodation space since its incorporation in 2012 and has developed a unique two-sided technology platform focused on comprehensively addressing key pain points of its patrons (being the owners, lessors and/or operators of storefronts listed on its platform) on the supply side and its customers (being travellers and guests who book accommodations at its patrons’ storefronts through its platform) on the demand side.

Strengths of Oyo

• Scaled footprint with leadership in core growth markets
• Full-stack technology platform driving strong value proposition for its patrons and customers
• High degree of engagement with its patron and customer community
• Virtuous flywheel driven by strong network effects
• Inherent financial strength with strong unit economics
• Strong and trusted consumer brand
• Strong leadership team with deep experience

Risks of Oyo IPO

• History of net losses in each year since incorporation and ability to achieve profitability may be delayed
• May face difficulties in executing its expansion plans and implementing its growth strategies
• Failure to retain existing patrons and customers or acquire new patrons and customers in a cost-effective manner may decrease revenues
• Negative publicity could damage brand and thereby harm ability to compete effectively
• Failure to innovate and develop platform may result in suffering of business and results of operations
• Reliance on third-party distributors, travel management companies and global distribution systems to market and distribute storefronts, may adversely affect margins and profitability
• Adverse outcome in legal proceedings involving Zostel may materially and adversely affect business
• Business and activities may be regulated by competition laws of various jurisdictions
• Decline in the travel and accommodation industries or economic downturn could materially and adversely affect business
• Pricing methodologies and the revenue share may be impacted by a number of factors and it may not always be successful in attracting and retaining patrons and customers

Peer Comparison

There are no listed companies in India that engage in a business similar to that of Oyo. Hence, it is not possible to provide an industry comparison in relation to it.

Anchor Investor Bidding Date TBA

IPO Registrar and Book Running Lead Managers

• IPO Registrar: MUFG Intime India Private Limited
  
• Book Running Lead Managers: ICICI Securities, Nomura Financial Advisory, JM Financial and Deutsche Equities India
  

Business Model

Oyo’s business model relies on its patrons who list their storefronts on its platform and its large base of customers who book accommodations at its patrons’ storefronts through the platform.

The company distributes its patrons’ hotel and home storefront inventory through the D2C channels on its platform and through indirect channels with third party OTAs and generally earn an average revenue share of 20% to 35% of GBV (net of discounts and loyalty points), which creates strong alignment between the company and its patrons.

It also offers a listing only service, where patrons can list their storefronts on its platform for a fixed subscription fee.

Company Growth Trajectory

Between FY23 and FY25, the total revenue of the company grew from ₹5,464 crore to ₹6,253 crore. During the same period, the company turned around its bottom line from a loss of ₹(1,287) crore to a small net profit of ₹247 crore. In this period between FY23 and FY25, the EBITDA of the company grew more than 4-fold from ₹257 crore to ₹1,084 crore.

Market Position

As of March 31, 2024, Oyo had over 175,000 storefronts across more than 35 countries listed on its platform. For FY24, the company had global Gross Business Value (GBV) of ₹10,700 crore. The company also witnessed 40% increase in hotel count in FY24. Year FY24 was also the first year that the company reported PAT profitability.

The company has achieved operational efficiency and profitability across markets. It has one of the largest portfolios of hotels in key geographies. The company is gradually elevating its offerings towards premiumization to boost margins. Its India app ratings have consistently improved in the last 6 quarters. The turn to profitability was driven by business growth and strategic cost savings.

How to Check Allotment Status of Oyo IPO?

1. Visit the Registrar’s Website

• Visit the website of Link Intime India
  
• Choose ‘Public Issues’ from Investor Services dropdown
  
• Choose the name of the company from ‘Select Company’ dropdown
  
• Enter any of these - PAN Number, Application Number, DP/Client ID, Account Number / IFSC
  
• Click on Submit to check the status
  

2. Check on the National Stock Exchange Website

The National Stock Exchange (NSE) website has an IPO bid verification module. You can use it to check the allotment status of Oyo IPO. Go to the NSE website and find the 'Invest' tab. Click on 'Verify IPO Bids' under 'Resources & Tools'.

On the NSE IPO bid verification page, enter:

• Company name from dropdown
  
• Application number
  
• PAN
  

Then click 'Submit' to know the allotment status.

3. Check on the BSE Website

The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to the BSE website and find the 'Investors' tab. Under 'Investors', click on 'IPO'. This will take you to the IPO allotment status page. On the BSE IPO page, follow these steps:

• Select 'Equity' from the dropdown menu
• Choose 'Oyo' in the next dropdown
• Enter your application number
• Enter your PAN
• Click 'Search’ to know allotment status

How to Apply for the Oyo IPO?

To apply for this IPO:

• Log in to your Kotak Neo Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
  
• Specify IPO details: Enter the number of lots and the price you wish to apply for.
  
• Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange.
  
• Mandate Notification: Your UPI app will receive a mandate notification to block funds.
  
• Approve Request: Your funds will be blocked once you approve the mandate request on your UPI.