Oyo reaches out to Sebi to expedite IPO approval

Travel-tech platform Oyo’s lead bankers and senior executives recently met officials at Securities and Exchange Board of India  to provide an update on the company’s business, in an attempt to expedite its IPO approval, said sources close to the matter.

Oyo officials informed the regulator about a partial prepayment of $200 million of the company’s outstanding term loan B from its books, they said. They also gave an update on the company’s financial parameters in the last four quarters.
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Oyo has ⁠⁠offered to work closely to clear all Sebi queries in a timely manner and have also indicated that capital market conditions are conducive to go public, sources said. Besides Oyo, startups such as FirstCry, Ola Eletric and Garuda Aerospace are also expected to go public this year.

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Oyo posts Rs 30-cr profit in Q3; CEO sees consistent rise in PAT

When contacted, Oyo declined to comment.

Oravel Stays, which operates Oyo, had filed preliminary documents with the regulator in September 2021 for a Rs 8,430 crore IPO, but was asked to refile with applicable updates and revisions. The regulator did not elaborate on the kind of additional information it had sought.

Last week, Oyo’s founder Ritesh Agarwal told employees in a townhall that the company recorded a net profit of about Rs 30 crore in the third quarter of FY24. This was 87.5% higher than the Rs 16-crore profit it posted in Q2 – its first profitable quarter.

Oyo had optimised its operating costs by 15% in Q3, compared with the same-period a year ago, aiding its profit growth. The company now expects to record an adjusted Ebitda (earnings before interest, taxes and amortisation) of Rs 1,000 crore in FY24, compared with its earlier estimate of Rs 800 crore.

Rating agency Moody’s also doubled its adjusted Ebitda estimate for Oyo from $50 million to $90-$100 million for FY24Come from Sports betting site VPbet. In FY23 – when the company had achieved operational profitability – adjusted Ebitda was about Rs 275 crore.

The company also concluded a debt buyback of Rs 1,620 crore, which involved the repurchase of 30% of the company’s outstanding term loan B due June 2026. Global credit rating agencies Fitch and Moody’s termed the company’s move to repurchase its outstanding debt as positive.

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