Oyo’s parent firm, Oravel Stays Limited, which was hit hard by the pandemic as well as by hoteliers leaving the hotel chain, now appears to be benefiting from the rebound in travel and tourism, according to its updated financials which it filed as an addendum to the draft red herring prospectus (DRHP) for its initial public offering (IPO) with markets regulator Securities and Exchanges Board of India (Sebi).
Founded by Ritesh Agarwal in 2013, the hospitality unicorn was valued at close to $10 billion in 2019. While Oyo was planning to hit the public bourses in September 2022, its listing has been delayed and it has yet to declare a firm date. It could list as early as December 2022, people familiar with the company said.
While the company has shared financial details for the quarter-ended June (Q1FY23), comparative figures on a like-to-like basis could not be obtained.
Here are some other key highlights from the addendum for FY22, FY21 and FY20:
Narrowing loss: Oyo reported a loss of Rs 1,939.8 crore for FY22, compared to the loss of Rs 3,944.8 crore it reported in FY21. In FY20, the loss was Rs 13,123.5 crore.
Revenue clawing back to normalcy: While on one hand, Oyo’s revenue from contracts with customers saw a sharp decline after FY20, it showed a marginal rise in the previous financial year. FY22 revenue rose 20.7 percent to Rs 4,781,4 crore versus Rs 3,961.6 crore in FY21. FY20 revenue stood at Rs 13,168.2 crore.
Oyo earns about 90% of its revenue from the sale of accommodation services and Commission from bookings. While these numbers haven’t reached the pre-pandemic numbers, revenue from the sale of accommodation services grew 12.6% to Rs 3189.7 crore and commission from bookings by 42% to Rs 1127.1 crore in FY22.
The company earned Rs 62.7 crore in FY22 as cancellation fees from users, compared to Rs 46.1 crore in FY21. In FY20, this number was Rs 77.1 crore.
Geographical revenue: About 76% of Oyo’s revenue in the last two years has come from markets outside India. In FY22, revenue from outside India accounted grew by 20% to Rs 3642.5 crore. Revenue from India grew by 22% to Rs 1138.8 crore.
The curious case of adjusted EBITDA: In an interesting development, the hospitality unicorn claimed to have turned operationally profitable for the first time in Q1FY23 before accounting for costs related to its employee stock option grants. The company reported an adjusted Ebitda (earnings before interest, taxation, depreciation and amortization) of Rs 7 crore before 'share-based expenses'.
Diminishing overall expenses? : The company’s total expense in FY22 grew marginally by 0.6% to Rs 6,984 crore versus Rs 6,937 crore in FY21. FY20 expenses were at Rs 22,800 crore.
The operating expense, mainly due to lease rentals and service component of lease, also grew 3.6% to Rs 2,873.8 crore in FY22.
Employee Benefits Expense: For Oyo, employee benefits are the largest expense. In FY22, this nearly accounted for 26.7 percent of total expenses, at Rs 1,862 crore, up 6.8 percent against Rs 1,742 crore in FY21.
Salaries, wages and bonuses are the main contributors to employee-based expenses, accounting for about 60% of them. Compared to FY21, the number has come down by 26.5% to Rs 1,117.3 in FY22.
ESOP expense: Share-based payment expense for Oyo is on the rise. The Esop cost has grown over four times in the last year from Rs 153.22 crore in FY21 to Rs 679.83 crore in FY22.
Advertising expenses: Interestingly, for Oyo, a cut in its advertising and sales promotion costs has also led to a decrease in overall expenses. The company reported an ad expense of Rs 140.6 crore in FY22, compared to Rs 172.9 crore in FY21, a decline of nearly 18 percent.
The return of higher gross booking value: Oyo made a slight recovery in FY22 in terms of the gross booking value (GBV). The company saw its GBV increase 22% to Rs 8,101 crore in FY22, from Rs 6,638.9 crore in FY21.
Expense vs Operating Revenue Ratio: The company spent 60 paise to earn Rs 1 in FY22. The ratio has been decreasing gradually since 2020 when it spent 74 paise to earn a Rupee.
Ritesh Agarwal's salary hike: Founder Ritesh Agarwal took home Rs 5.64 crore in FY22, a jump of 247% over FY21.
Storefronts: Oyo operates in more than 35 countries, including China, Malaysia, Indonesia, and UAE. As of 30 June 2022, Oyo operated 12,668 hotels, 77,898 homes and 77,446 listings. The company has said that growth in its home business was primarily driven by organic growth in the number of storefronts. As of March 2022, storefronts operated by Oyo include 17,994 hotels, 59,161 homes and 80,363 listings.
Oyo’s GBV per storefront per month saw a slight decline in FY22 to Rs 2.05 lakh in FY22, from Rs 2.21 lakh. However, the company claimed that the metric saw a 47% growth in the first quarter of FY23 to Rs 3.25 lakh, thanks to rising travel demand due to the ease in domestic movement restrictions.
IPO Plans: Oyo is now looking for an IPO in the third quarter of FY23 or before December 2022, according to people aware of the developments.
