Oyo Is Losing Rs 76,000 Every 60 Seconds: Hotel Association Asks SEBI To Cancel Oyo IPO
The Federation of Hotel and Restaurant Associations of India (FHRAI) has requested SEBI to call off Oyo’s Initial Public Offering (IPO) citing the massive losses suffered by the SoftBank-backed company in recent years.
Oyo has suffered major losses
Oyo suffered losses of Rs 3,943.84 crore in 2020-21 (FY21), translating to a loss of over Rs 76,077 every minute, the FHRAI said. Since its launch in the year 2013, Oyo has been running in losses and its total turnover has fallen a stark 69% from Rs 13,413 crore in the year 2020 to Rs 4,157 crore in 2021, the association added. FHRAI stated that the Oyo’s IPO will only sweep away public money while raising the wealth of its founders and key management.
Earlier, FHRAI had objected to gross misstatements and inadequate disclosures in Oyo’s Draft Red Herring Prospectus (DRHP).
Previously, FHRAI had also filed a complaint with the SEBI detailing Oyo’s tax evasion and the Directorate General of GST Investigation (DGGI) had filed a case of GST or service tax evasion against Oyo and its subsidiaries, FHRAI said.
Serious economic offenses committed by OYO
FHRAI has further added that there are several FIRs registered against Oyo under sections 420, 406, and 409 of the IPC some of which are serious economic offenses entailing a maximum punishment extending up to imprisonment for life.
Oyo has delayed its listing plans amidst volatile market conditions. Oyo had filed its draft papers with SEBI last year in October.
The SoftBank-backed company had filed a request for immunity in late February and the request was still in process as per the SEBI’s website. There were no details mentioned but, the people in the know about the development said that Oyo was trying to get SEBI’s permission to file an updated draft prospectus, as there are material changes since it was first filed for an IPO late last year.
Oyo had cut the size of its issue, from the initial over Rs 8,430 crore it sought to file as it was looking to do away with the Rs 1,430 crore offer for sale (OFS) component altogether.
Previously it was reported that Oyo is considering slashing its fundraising target by half or even shelving the debut. Oravel Stays could cut its Indian IPO from the nearly $1 billion initially sought to half of that amount.