Hospitality and travel tech startup OYO reported a 24% YoY rise in revenues to Rs 2,904.62 crore, while narrowing its losses to Rs 747.13 crore in the first half of the financial year 2023 (H1FY23). The hospitality unicorn, however, reported a positive adjusted Ebitda of Rs 62.93 crore in H1FY23 compared to a negative Ebitda of Rs 280.36 crore in the same period last year.
The latest financials from OYO were part of a fresh addendum filed with market regulator Sebi on Saturday. OYO had filed a draft red herring prospectus (DRHP) with Sebi last year in October to raise Rs 8,430 crore, but had later scrapped the plan. The IPO-bound company is said to be targeting a public issue in 2023 even as unfavourable market conditions threaten the startup industry.
OYO recognises revenue collected from its contracts with customers (or hotel partners) after deducting operating expenses. It currently categorises hotel partners into two categories — hotels and homes. Across both categories, the hotel aggregator had around 168,711 storefronts as of September 30.
For its hotel business, OYO reported a gross booking value (GBV) per storefront per month of Rs 3.47 lakh in H1FY23, which increased 68.7% in comparison to the same period last year, largely driven by a recovery in travel demand.
OYO’s GBV per storefront per month for their homes business increased 4.2% from Rs 37,878 for the six-month period ended September 30, 2021 (H1FY22) to Rs 39,458 for the six-month period ended September 30 (H1FY23).
Total expenses for H1FY23 stood at Rs 3,630.14 crore, which increased marginally from around Rs 3,333.15 crore compared to the previous half-year period. OYO’s marketing and promotion expenses increased by 19.3% YoY from Rs 336.00 crore in H1FY22 to Rs 400.7 crore in H1FY23, primarily as a result of an increase in marketing and distribution expenses.
From a few hundred hotels when it started 2013, OYO has gone on to cover more than 800 cities as of 2019, as per an earlier statement. Note that the startup had discontinued providing total room count numbers under its key performance indicators (KPIs) in the Sebi addendum. But prior to the pandemic, a public statement from OYO in June 2019 showed that it had around 23,000 hotels, 850,000 rooms, and 46,000 vacation homes in more than 800 cities, including the US, Southeast Asia and Europe.
OYO’s long-awaited IPO has been marred with several setbacks in the recent past, mostly due to the disappointing performance of tech stocks such as Paytm, Zomato, Nykaa and others. OYO was also served with a heft penalty of Rs 169 crore by India’s competition regulator CCI alongside MakeMyTrip, for unfair business practices. OYO, however, got a stay order on the CCI fine from the NCLAT on November 23.
Analysts and hotel industry experts that FE spoke with further point out that Softbank’s valuation markdown of OYO is startling, given its vast tangible hotel properties and listings that can be measured and valued.