Hospitality startup Oyo Hotels and Homes’ losses widened more than six-fold to ₹2,384.69 crore during the financial year ended March 2019 (FY19), even as revenues rose over four-fold during the period, signaling that the six-year-old startup may have a long way to go before it can go public.
According to a valuation report filed with the registrar of companies (RoC), Oyo reported operational revenue of ₹6,457 crore in FY19, up four-fold from ₹1,413 crore reported a year ago. Total expenditure rose five-fold to ₹9,027.53 crore in FY19 compared with ₹1,835.38 crore reported a year ago.
A majority of Oyo’s expenses is attributed to operational expenses which ballooned to ₹6,131.65 crore in FY19, a five-fold increase from a year ago. Oyo also spent around ₹1,539 crore in employee-related expenses in FY19, a six-fold jump year-on-year.
Mint reported in July that Oyo is preparing for an initial public offering (IPO) in the next two-three years at a hefty valuation of $18 billion. However, as per listing norms in India, a company has to return pre-tax operating profit for at least three years for a direct listing. The other available route for listing in India is through the Securities and Exchange Board of India-regulated Innovator’s Growth Platform (IGP) meant for SMEs and startups.
The latest valuation report prepared by Oyo’s auditors pegs the startup’s post-money valuation at $5.32 billion ( ₹36,658 crore) as of June 2019, while its enterprise value stood at $755.3 million during the same month. Enterprise Value is an alternative to computing the value of a company based on the market capitalization of its equity, total debt and cash.
The valuation report was filed along with Oyo’s proposed plans to raise $1.5 billion in fresh Series F funding round at a valuation of $10 billion, according to a company statement in October. As a part of the round, RA Hospitality Holdings’ will infuse nearly $700 million as primary capital in the company, with the balance $800 million being added by other existing investors. The fundraising is the largest for a unicorn in India since SoftBank invested $2.5 billion in Flipkart in 2017.
The valuation report also pegs Oyo’s China business valuation at $991 million, while the Japan business valuation stood at $256.7 million as of June 2019. The valuation for “rest of world business”, including 16 countries such as Singapore, Malaysia, US, United Arab Emirates, UK, stood at $1.21 billion.
“The said numbers are not yet the final audited financials, and therefore misleading. The press must have accessed a valuation report prepared by OYO’s valuers (not auditors) that includes some projected financials for FY 19. The share prices are based on fair market value and are not reflective of the share premium price. We would like to clarify again that these are not yet the final audited financials and the same will be issued later by the company along with the annual report that we issue every year and file with the RoC as well,” said an Oyo spokesperson in response to Mint’s queries.
This article was first published on livemint.com