OYO requests SEBI to expedite IPO approval
OYO's top bankers and executives met with the Securities and Exchange Board of India (SEBI) to discuss the company's progress and speed up its IPO approval. The Economic Times reported that the hospitality giant tried to convince SEBI by talking about its loan payment and positive ratings. It informed SEBI about a $200 million partial prepayment of its outstanding Term Loan B (TLB) and the positive feedback from international rating agencies Moody's and Fitch.
OYO confident on financial performance and improved projections
Founder Ritesh Agarwal told employees that OYO's profit after tax (PAT) doubled sequentially in Q3 of FY 2024 to Rs. 30 crore, marking its second profitable quarter. He also shared that the company achieved adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of Rs. 750 crore in 2023 and expects to reach an adjusted EBITDA of Rs. 1,000 crore this fiscal year. Agarwal credited this growth to increased customer confidence, improved customer experience, and favorable market conditions.
Debt buyback and credit rating agencies' response
In November 2023, OYO completed a debt buyback of Rs. 1,620 crore, repurchasing 30% of its outstanding TLB due in June 2026. Global credit rating agencies Fitch and Moody's called the move 'positive.' Fitch noted that the action would enhance OYO's EBITDA leverage and could lead to a positive rating action. Meanwhile, Moody's doubled its adjusted EBITDA estimate for FY 2024 from $50 million (forecasted in May 2023) to $90-$100 million.
SEBI increases scrutiny of IPO-bound companies
However, OYO's eagerness to go public comes at a time when the SEBI is intensifying its scrutiny of companies that wish to hit the share market. As per Reuters, SEBI has declined IPO documents of at least six companies and mentioned that the corporates are not being transparent about the intention behind raising funds from the stock market.
