Following reports of a markdown by investor SoftBank, Oyo’s valuation in the private market declines before its IPO
- ByStartupStory | October 7, 2022
Following rumours that SoftBank marked down the worth of the hospitality and travel-tech company in its private books, industry players estimate the private market value of OYO, which is close to going public, to be about USD 6.5 billion.
Nearly 12.3 lakh shares of the company were sold in the private market in the week ending September 30, 2022, compared to over 1.6 lakh shares sold in the week before. According to a source, the sell-off came after news broke that SoftBank, the company’s main investor, had reduced the hospitality platform’s book value by 20% to USD 2.7 billion.
When OYO updated its financial information in its draught prospectus last month, revealing positive EBIDTA in addition to the lowering of losses, the stock price had increased to Rs 94 per share on the secondary market. However, the company’s worth dropped by over 13% to Rs 81 per share in the days that followed news of SoftBank’s downgrade of OYO’s valuation, according to the source.
Vaishali Dhankani, CEO & Founder of Analah Capital, responded via email: “Last year, transactions of OYO shares in private markets occurred at about USD 8 billion range while in the recent past transactions are happening up to USD 6.5 billion value.
One anticipates a stronger bottom line and adhering to its niche because some of OYO’s “previous distractions seem to have gone away,” according to Dhankani, who is also the CEO of Tradeunlisted.com, a tech-based distribution platform for private equity. OYO recorded revenue of Rs 1,459.32 crore for the three months ending June 30, 2022, in a regulatory filing last month.
The company, which had submitted preliminary paperwork to Sebi in October of last year to raise Rs 8,430 crore through an initial share sale, also reported: “adjusted EBITDA” of Rs 7.27 crore for the quarter that ended June 30, 2022, a significant improvement from the adjusted EBITDA loss of Rs 471.72 crore in FY22.
OYO’s restated loss for the three months ending June 30, 2022, was Rs 413.87 crore, according to the filing. It reported a loss of Rs 1,939.8 crore for the fiscal year that ended on March 31, 2022.
According to OYO, a decline in the number of hotels to 12,668, sequentially down from 17,994 in the fiscal year ended March 31, 2022, caused its overall number of “storefronts” to fall to 1,68,012 in the quarter ended June 30, 2022, from 1,68,639 as of March 31, 2022.
OYO was initially considering a valuation of over USD 10 billion when it submitted the draught prospectus for its first public offering, but it later got ready to accept a lesser valuation of roughly USD 7-8 billion
Follow Startup Story
Related Posts
