OYO to delay IPO by a quarter; SEBI seeks additional info on risk factors, KPIs & litigation

Hospitality tech start-up Oravel Stays, which was planning to make its stock market debut in the first half of 2023, will delay the IPO by a quarter, a source told Business Today. The source said that the market watchdog, the Securities and  Exchange Board of India (SEBI), has written back to the company asking it to update additional sections in its Draft Red Herring Prospectus (DRHP), such as updated risk factors, key performance indicators (KPIs), outstanding litigations, basis for valuation etc.  

“This would delay OYO’s proposed IPO plan by around three months as the exercise of updating the DRHP and updated filings would consume the additional time,” the source said. The Ritesh Agarwal-led company is also required to “provide any latest disclosures at the appropriate pre-IPO stage”.

The company declined to comment on the same.

The updated information will also revise the basis of the offer price and other sections of the DRHP. The processing time of collating the additional information and submitting will take at least a quarter, which would delay the stock market debut.

After weathering tough two years owing to the COVID-19 pandemic, the company revived its stock market plans this year. In September, the company filed an addendum to its DRHP which revealed its financials for FY20, FY21, and FY22. Recently, the company also announced its financial results for the ongoing fiscal year, which saw the revenues in H1 of FY23 grew 24 per cent to Rs 2,905 crore. OYO also reported a 69 per cent increase in its gross booking values (GBV). GBV is the monthly revenue the company earns per hotel.  

However, the tech start-up also reported a net loss of Rs 333 crore in the second quarter of FY23. OYO was launched in 2012 by Agarwal. OYO is backed by the likes of Microsoft, SoftBank Vision Fund, Lightspeed Venture Partners, Sequoia Capital India, and others.

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