SoftBank Cuts Internal Valuation of Oyo to US$2.7bn from US$10bn: Report
IANS 22 September 2022
Masayoshi Son-led SoftBank has cut the internal valuation of Ritesh Agarwal-run Oyo to US$2.7bn (billion) from its last reported valuation of nearly $10 billion, TechCrunch reported on Thursday.
The reported valuation cut comes at a time when the hospitality major is eyeing its initial public offering (IPO) in months to come.
The report, citing a source, said that SoftBank is the largest investor in Oyo—at 45%—and its estimation "is a strong signal of the startup's current health."
A company spokesperson termed the report as 'inacurate', saying it makes 'no rational basis' as the company has actually improved its finances.
"We are confident that the above speculations about valuation markdown is patently incorrect. Valuation is an outcome of business performance. As per our latest audited results, we have clocked Rs7 crore maiden adj EBITDA profit in the June quarter, at 41% gross profit margin and a 45% increase in gross booking value per hotel per month vs last financial year," the company spokesperson said in a statement.
"There is no rational basis for a markdown," the spokesperson added.
Oyo's other significant investors include Sequoia India and Lightspeed Venture Partners India.
The hospitality major has filed an addendum to its earlier submitted draft red herring prospectus (DRHP), filed in October 2021 for its IPO, with the Securities and Exchange Board of India (SEBI).
The company is now eyeing early 2023 for its IPO amid volatile global market conditions.
The DRHP addendum also triggered a major controversy in India.
Former Infosys Director TV Mohandas Pai slammed Oyo for allegedly misleading investors via 'fake accounting' as the hospitality major reported its maiden positive EBITDA during the first quarter of the current fiscal.
Oyo claimed (adjusted) EBITDA-level profitability of Rs10.6 crore for the June quarter.
Abhishek Gupta, Oyo's Group Chief Financial Officer (CFO), replied to Mr Pai, saying that the EBITDA is 'clearly reported'.
"EBITDA is clearly reported & is higher Rs10.57 cr for Q1FY23 than Adj EBITDA of Rs7.26 cr. Other Income not included in EBITDA & Adj EBITDA. All numbers are from audited signed financial statements. Global non-GAAP metrics are defined transparently," Gupta had tweeted.
The company said the revenue for FY21-22 was Rs4,905 crore, a growth of 18% from Rs4,157.3 crore reported in FY20-21.
Oyo managed to halve its losses for FY21-22 at Rs1,892.2, from Rs3,382.5 crore in FY20-21.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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