SoftBank-backed hospitality and travel-tech firm OYO Hotels is reducing the shares it aims to sell via a stock-market debut by about two-thirds amid tech headwinds, said a report on Monday.
The company reported an adjusted EBITDA of Rs 63 crore in the first half of FY2023 in its filing with Securities and Exchange Board of India (Sebi) in an update to its Draft Red Herring Prospectus (DRHP).
In January, OYO was asked by Sebi to refile the draft IPO (Initial Public Offering) papers with certain updates. In September 2021, OYO had filed preliminary documents with Sebi for a Rs 8,430-crore IPO.
The IPO was delayed due to the then volatile market conditions making the company prepare to settle for a lower valuation at around $7-8 billion instead of the $11 billion it was targeting initially. Oyo said in December that it is cutting 600 jobs in its corporate and technology departments.
"In the filing, OYO will outline plans to sell just a third of the new shares it originally planned, eroding the amount of fresh capital it is expected to receive," reported Bloomberg citing a source.
Meanwhile, OYO CEO Ritesh Agarwal said the firm estimates its revenue in FY23 to be more than Rs 5,700 crore, up 19 per cent from Rs 4,780 crore it had recorded in FY22.
At a town hall on Monday, Agarwal told employees of the firm that OYO is aspiring to reach adjusted EBITDA of nearly Rs 800 crore in the next financial year.
Sustained growth in India, Indonesia, the US and the UK and relevant optimisation as well as synergies in its European vacation homes business have led to better financials of the company, he said in a presentation at the gathering with employees.
Agarwal outlined that the key focus areas of OYO in the calendar year 2023 will be on Profit After Tax (PAT) along with consistent momentum in EBITDA; achieve cash flow positive in FY24; cost efficiency and improving contribution margins and making storefront additions, among others.
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortisation.
He said the company is expected to close FY23 with more than 1.72 lakh storefronts, as compared to 1.69 lakh in FY22, a growth of nearly 2 per cent.
Agarwal told the employees that OYO has a current cash balance of Rs 2,700 crore and the company hoped it would end up consuming very little of it for existing operations.
With an improvement in cash flow, OYO's reliance on external funds has also gradually decreased overtime, he added.
With inputs from agencies