Oravel Stays Limited (OYO) Unlisted Shares

Oyo was founded in 2012 by Ritesh Agarwal. The startup began to work with small hotels to standardize everything from bed linen to bathroom shower fittings.

The company has the largest footprint in terms of hotel storefronts in India and SEA and the second-largest footprint in Europe in terms of home storefronts among full stack short-stay accommodation players.

The company’s unique business model helps their Patrons transform fragmented, unbranded and underutilized hospitality assets into branded, digitally-enabled storefronts with higher revenue generation potential and provides their customers with access to a broad range of high-quality storefronts at compelling price points.

OYO was identified as the most valuable Travel and Hospitality brand in India and 30th most valuable brand overall in India by a study conducted by Kantar for 2020.

OYO’s number of storefronts stood at 1.68 lakh as on March 31, 2022 and 168,012 as on June 30, 2022.

A few major competitors of OYO are MakeMyTrip, EaseMyTrip, bookyourown.net, etc.

Oyo Company Details

COMPANY NAME OYO ROOMS
NATURE OF BUSINESS Hotels / HOSPITALITY
ISIN NO INE:130H01012
FACE VALUE Rs.1/-
Current Unlisted Share Price Rs 80 per equity share (negotiable)
Lot Size 100+

Latest Financials: FY 2022

OYO, the Softbank-backed hotel aggregator, has reported an EBITDA of Rs 7 crore (around $1 mn) adjusted for the first quarter of FY23 and driven by an increase in gross booking value (GBV) and improved unit economics. Losses for Q1 FY23 came in at Rs 353.4 crore. It also reported its first quarter (Q1 FY23) of positive EBITDA at Rs 10.57 crore.

In FY22 revenues were Rs 4,905 crore, up 18 per cent against Rs 4,157.3 crore reported in FY21. For the first quarter of FY23 (April-June) revenues were Rs 1,504.5 crore.

According to the latest filing, hotel aggregator OYO has posted a loss of Rs 2,140 crore in FY22, as compared to Rs 4,103 crore in FY21.

Monthly gross booking value per hotel saw 47 per cent growth in Q1 FY23 to Rs 3.25 lakh against Rs 2.21 lakh for 2021-22.

Monthly gross bookings per home in the vacation homes business have also improved marginally to Rs 39,000 in the first quarter of 2022-23.

OYO’s GBV per storefront per month for the three month period ended June 30, 2022 stood at Rs 3.25 lakh in Q1 of FY23, aided by the resumption in travel. It was at Rs 2.21 lakh in FY22.

Company’s adjusted gross profit for the three month period ended June 30, 2022 was at Rs 602.19 crore and the adjusted gross profit margin was 41.3 per cent for the three month period ended June 30, 2022.

The company said it has acquired Direct Booker, a Croatian vacation rental company, and Denmark based-holiday home Bornholmske Feriehuse.

Valuation

Oyo, formally known as Oravel Stays Ltd., was valued at $9 billion according to researcher CB Insights.

At current share price of around Rs 60 per share, Oyo commands market capitalisation of about Rs 28,500 crore.

Shareholding Pattern

SoftBank Group Corp holds about 47% in the Gurgaon-based startup. The founder Ritesh Agarwal and his holding company- RA Hospitality Holdings, hold a 33.16% stake in the company. Some of the notable names in this list are SoftBank Group, Greenoaks Capital, Lightspeed India, and Sequoia Capital.

IPO Update

Oyo said it filed the addendum to the draft red herring prospectus (DRHP) on September 19 for its initial public offering (IPO). The company’s proposed IPO comprises a fresh issue of equity shares aggregating up to Rs 7,000 crore and an offer for sale Rs 1,430 crore, according to its DRHP.

The company is now targeting an initial share sale in early 2023 provided that India’s stock market continues to hold up and economic conditions improve.

The startup is now focusing on four main regions: India, Malaysia, Indonesia and Europe, where it manages vacation homes and has cut down operations in markets it previously considered crucial, such as the US and China, where its employees now measure in the single digits.

The company had said that the proceeds from the public issues will be utilised for prepayment or repayment, in part, of certain borrowings availed by its subsidiaries, funding organic and inorganic growth initiatives, and general coporate purposes.

Outlook

The company appeared determined to rein in costs and improve the bottom line, which would appeal to markets.

Oyo supports hotel and vacation home partners with technology and product services, as well as customer support.

Hotel owners can self-enroll, and manage bookings and services on its app.

Oravel Stays Limited’s customers use their mobile applications and websites to access their growing selection of storefronts around the world and to enhance their stay experience through their ancillary services.

Their end-to-end presence across the value chain and deep integration with their Patrons’ businesses and Customers’ experience help them build a strong understanding of their needs and preferences.

They generate a significant share of demand through their D2C channels. Strong customer retention also leads to a high share of demand generated from repeat customers and new customers acquired through organic channels.

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