Oravel Stays Ltd, the parent company of Indian hospitality unicorn OYO, has been asked to refile its draft red herring prospectus (DRHP), and incorporate certain updates before it can go ahead with its initial share sale plans.
India’s capital markets regulator, the Securities and Exchange Board of India (Sebi), returned the DRHP on Dec 30, asking OYO to refile the IPO application with updates and revisions.
OYO’s IPO is likely to get pushed ahead by a few months now. The travel-tech firm had filed preliminary documents with Sebi in September last year to raise Rs 8,430 crore via the IPO route. The proposed offering consists of a fresh issue of shares of up to Rs 7,000 crore and an offer-for-sale of Rs 1,430 crore.
While Sebi has not yet specified details of the updates or revisions required in OYO’s draft documents on its website, it is understood to have asked the hospitality firm to update information with respect to updated risk factors, key performance indicators (KPIs), outstanding litigations and basis for valuation.
Earlier, OYO had filed an addendum to its DRHP, which included its financials for the first half of FY23 (i.e. April-September 2022). The Gurugram-headquartered company had reported a profit of Rs 63 crore during the said period compared with a loss of Rs 280 crore a year ago.
OYO’s revenues in the first half of FY23 jumped 24% year-on-year to Rs2,905 crore. The company has a cash corpus of Rs2,785 crore.
OYO counts Microsoft, SoftBank Vision Fund, Lightspeed Venture Partners, and Sequoia Capital India, among others, as its investors.
Several big Indian startups, which have received the market regulator’s go-ahead for an IPO, are also seeing a delay in their listing plans owing to bleak market conditions and depressed valuations.
In 2022 only two startups — logistics company Delhivery and startup intelligence and analytics platform Tracxn — have listed on the Indian bourse.
Since the beginning of 2021, at least 15 startups have received Sebi’s approval to launch an IPO. Of that, the approval has already expired for six Indian startups namely Ixigo, Fincare Small Finance Bank, Medi Assist Healthcare Services, MobiKwik, Skanray Technologies, and Utkarsh Small Finance Bank, according to data available with Prime Database Group.
According to public listing rules in India, a company must launch its IPO within a year of getting the regulator’s nod.