OYO Eyes Third IPO Attempt After Record ₹623 Cr Profit
In a significant development, hospitality firm OYO is planning to file its initial public offering (IPO) papers with the Securities and Exchange Board of India (SEBI) between August and September 2025, targeting a valuation of $6-7 billion. This announcement comes on the back of a remarkable ₹623 crore profit in FY25, marking a staggering 172% year-on-year increase.
For those who may not be familiar with OYO’s journey, the company has been on a path to file its IPO for some time now. In fact, this will be OYO’s third attempt at going public. The company first filed its IPO papers with SEBI in 2019 but withdrew them later the same year due to market volatility. It then filed its papers again in 2022 but was forced to delay its IPO plans due to regulatory issues.
So, what has changed this time around? For one, OYO’s financial performance has been nothing short of exceptional. The company’s profit in FY25 is a testament to its ability to navigate the challenging hotel industry and come out stronger on the other side. In fact, OYO’s profit growth has been driven by a combination of factors, including its expanding presence in key markets, increasing occupancy rates, and rising average daily rates (ADRs).
Another significant development that has contributed to OYO’s renewed IPO plans is the Delhi High Court’s recent ruling in its favour in its dispute with Zostel. Zostel had claimed a 7% equity stake in OYO, which the court has now dismissed. This ruling has not only removed a major overhang on OYO’s stock but also provided the company with the clarity it needs to move forward with its IPO plans.
So, what can investors expect from OYO’s IPO? The company plans to use the funds raised from the IPO to fuel its expansion plans, including the acquisition of new hotels and the development of its technology platform. OYO has also hinted that it may use some of the funds to pay off debt and strengthen its balance sheet.
In terms of valuation, OYO is targeting a price-to-earnings (P/E) ratio of around 20-25 times, which is in line with industry norms. This valuation is significantly higher than what OYO was targeting in its previous IPO attempts, reflecting the company’s improved financial performance and growing market presence.
OYO’s IPO plans are not without their risks, however. The company faces intense competition in the hotel industry, which is characterized by low margins and high operating costs. Additionally, OYO’s reliance on technology and its ability to maintain its market share in the face of increasing competition from traditional hotel chains and new entrants will be crucial to its success.
Despite these risks, OYO’s IPO plans are likely to be closely watched by investors and industry observers alike. The company’s ability to execute its expansion plans and maintain its financial performance will be critical to its success in the public markets.
In conclusion, OYO’s decision to file its IPO papers with SEBI is a significant development in the hospitality industry. The company’s exceptional financial performance and the Delhi High Court’s ruling in its favour have provided it with the clarity it needs to move forward with its IPO plans. While there are risks associated with OYO’s IPO, the company’s ability to execute its expansion plans and maintain its financial performance will be crucial to its success in the public markets.
Source: https://startuptalky.com/news/oyo-set-to-file-ipo-papers-by-september/
