‘OYO may raise funds at $3-4 bn valuation’

Travel tech platform OYO is likely to raise equity funds from institutional investors at a valuation of $3-4 billion, its founder Ritesh Agarwal told employees on Wednesday, according to people aware of the matter.

The firm, backed by Softbank, had its maiden net profitable year in 2023-24 when it posted a profit after tax (PAT) of ₹99.6 crore ($12 million).The company registered a profit after tax (PAT) of ₹100 crore in the March quarter, the people said.

It also reported an adjusted Ebitda of ₹888 crore ($107 million) for the full fiscal year, up from ₹274 crore ($33 million) in 2022-23, the people said, citing a presentation shared in the townhall. Oravel Stays Ltd, the operator of the travel-tech company OYO, will refile its initial public offering (IPO) documents with the Securities and Exchange Board of India (Sebi) after the refinancing of its $450 million Term Loan B (TLB) at a lower interest rate, PTI reported last week.

“OYO has also been approached by friendly investors and may do a small equity round at a $3-4 billion valuation, or at $38-45 per share to further reduce its debt,” Agarwal told employees in the townhall. In 2023-24, OYO added about 5,000 hotels and 6,000 homes globally.

Gross booking value (GBV) per storefront per month for hotels stood at ₹3.32 lakh ($4,000). The travel tech platform’s gross margins improved in 2023-24, reaching ₹2,508 crore ($302 million) up from ₹2,350 crore ($283 million) in 2022-23. Operating costs also improved, decreasing from 19% of GBV in 2022-23 to 14% of GBV in 2023-24, the people said.