SoftBank has cut the Indian hotel chain valuation to $2.7 billion from $10 billion. The reported valuation cut occurs when the startup is months away from an initial public offering (IPO).
The reports suggest that SoftBank is the largest investor in OYO ━ at 45 per cent, nearly half of it━ , which is a strong signal of the startup’s current health.
An OYO spokesperson termed the cut ‘Inaccurate’ as the startup has improved its finances in recent months. The markdown makes ‘No Rational Basis’, the spokesperson added. But SoftBank declined the comment.
“We are confident that the above speculations about valuation markdown are patently incorrect. Valuation is an outcome of business performance. As per our latest audit results, we have clocked Rs 7 crore maiden Adj EBITDA profit in the June quarter, at 41 per cent gross profit margin and a 45 per cent increase in gross booking value per hotel per month vs last financial year,” the company spokesperson said in a statement.
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OYO has raised $3.23 billion in equity (primary + secondary) and debt funding rounds over the years, as per the reports. It has filed an addendum to its earlier submitted Draft Red Herring Prospectus (DRHP), filed in October 2021, for its IPO to the Securities and Exchange Board of India (SEBI).
The hospitality major is now eyeing on 2023 IPO amid volatile global market conditions. The company reported Rs. 4,157.3 crores in FY21 and Rs. 4,905 crores revenue in FY22, with an 18 per cent growth. OYO managed half its losses for FY22 at Rs 1,892.2 crores from Rs 3.382.5 crores in FY21.