Stock Market: OYO to refile IPO in February 2023

Softbank-backed hotel aggregation platform Oyo is set to refile its Draft Red Herring Prospectus (DRHP) with stock market regulator SEBI by the middle of February.

After the regulator asked it to refile the IPO prospectus with additional information, the company had earlier indicated that the process of refiling the comprehensive document could take up to 2-3 months.

The company refused to offer any estimation of the time it expects SEBI to take for approval, once the DRHP is filed. However, a source close to the matter said that the company hopes to get the approval by April 2023.

OYO's last submission to SEBI was the updated financial results of the first half of financial year 22-23. The regulator had subsequently asked OYO to refile the DRHP, updating all the relevant sections such as risk factors, KPI's, outstanding litigations, basis for offer etc.

OYO had filed preliminary documents with SEBI in September 2021 for a Rs 8,430 crore IPO. The proposed offering consisted of a fresh issue of shares of up to Rs 7,000 crore and an offer-for-sale of as much as Rs 1,430 crore.

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SEBI has mentioned in its letter to OYO, "The disclosures contained in present DRHP do not take into account the material changes/disclosures arising from Updated financial statements as filed through addendums leading to revised period for disclosures which in turn leads to necessities to make material updates in Risk Factors, Basis of Offer Price, Outstanding Litigations and update other relevant sections of DRHP."

An official OYO spokesperson said, "We are working on updating all key sections simultaneously. Responsibilities have been divided among different teams, with senior company leaders driving the collaboration with the Book Running Lead Managers, essentially the IPO bankers, the lawyers and the auditors. We are keen on refiling the DRHP by the middle of February 2023, if not earlier."

Earlier, the company had filed an addendum to its DRHP which included its financials for the first half of FY23. It reported a profit of Rs 63 crore for the first half of FY23 as against a loss of Rs 280 crore a year ago.

The company's revenues in the first half (April-September) of FY23 grew 24 per cent year-on-year to Rs 2,905 crore. Apart from improving operating performance, the company has a cash corpus of Rs 2,785 crore, the filing to Sebi showed. It had reported its maiden positive adj. EBITDA of Rs 63 crore, a 24 percent year-on-year increase in revenue and 69 percent increase in monthly booking value (GBV per month) for its hotels in the first 6 months of FY2023.

SEBI has asked the company to now also update other material information in the same vein. SEBI's move seems to be in line with its expectation of higher levels of transparency in the IPO process. Lately, it has asked companies to share additional KPI's and the basis for pricing of IPOs. In its meeting with bankers in December 2022, it also shared steps it is taking to reduce the IPO processing time which has increased to 113 days.