OYO’s Cash Flow Turns Positive in Q4 FY23 with Growth in Europe

• ByStartupStory     |    April 27, 2023

According to a source, OYO, the hospitality company, announced during a recent town hall meeting with its employees that it had achieved positive cash flow in the quarter ended March 2023, which is believed to be the result of post-pandemic growth. The company attributed the turnaround to increased bookings in all key regions, particularly in Europe, and stated that it is expected to end the quarter with a cash flow surplus of INR 90 crore.

According to a source, OYO has reported positive cash flow in Q1 of FY24, attributed to increased bookings across key geographies, especially in Europe. The hospitality giant is expected to end the quarter with a surplus cash flow of INR 90 Cr. Additionally, OYO’s homes business in Europe reportedly saw “unprecedented” advance bookings for both the summer season and off-season period between November and March. 

The company has a cash corpus of nearly INR 2,700 Cr. OYO’s CEO Ritesh Agarwal recently announced during a town hall meeting that the company achieved its first financial year of adjusted EBITDA profitability in FY23 and is expected to achieve an adjusted EBITDA of nearly INR 800 Cr in FY24.

OYO’s positive numbers are attributed to post-pandemic growth, leading the hospitality company to resume its public listing plans that were previously in limbo due to regulatory and market volatility issues. After SEBI flagged concerns and requested updated financials, OYO re-filed its draft red herring prospectus (DRHP) via a confidential pre-filing route.

OYO’s refiled draft red herring prospectus (DRHP) revealed a YoY revenue growth of 24% and a 69% increase in monthly booking value in H1 of FY23. The company expects its adjusted EBITDA to grow threefold to INR 185 Cr in H2 of FY23, driven by cost reduction and increased hotels business. OYO aims to achieve revenue exceeding INR 5,700 Cr in FY23. The startup’s renewed growth has led it to revive its public listing plans, which have been in limbo due to regulatory and market conditions.

OYO has revised its IPO plans and reduced the market offering size to $400 Mn-$600 Mn from the initial target of raising INR 8,430 Cr ($1.2 Bn) when it first filed its DRHP in September 2021. 

Despite this, the company aims to double its premium hotel offerings in India in 2023, adding nearly 1,800 hotels. OYO acquired Danish vacation home company Bornholmske Feriehuse in August 2022 to strengthen its European homes business. The hospitality giant is among the players that have benefited from post-pandemic growth and aims to increase its share in the Indian hotel booking market, which is projected to grow to $7.6 Bn by the end of 2023.

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