Hyderabad: The net loss of the country’s biggest hotel chain, Oyo Rooms, rose six times to Rs 2,384 crore during the financial year 2018-19 as exorbitantly high operating expenses and employee-related costs hit its bottom line. However, the company’s topline clocked a four-fold rise to touch Rs 6,547 crore against Rs 1,413 crore in the previous fiscal, as per a valuation report filed with the Registrar of Companies.
The bleak financial performance may prompt the Ritesh Agarwal-led hospitality startup to postpone its initial public offering (IPO).
Oyo Rooms recorded a five-fold jump in total expenditure at Rs 9,027.53 crore in FY19 compared with Rs 1,835.38 crore in FY18. Operating expenses increased to Rs 6,131 crore, a five-time rise compared to the previous year. The employee-related expenses jumped six-fold on a yearly basis to Rs 1,539 crore.
The Indian hospitality unicorn may not go for IPO as it reported huge losses in the previous financial year. According to Sebi norms, any company has to post pre-tax operating profit for three years in a row before going for a public issue.
Oyo Rooms planned for an IPO in 2022 at a hefty valuation of $18 billion. But, the current valuation is at $5.32 billion as of June 2019. The enterprise value, an alternative to evaluating the value of a company based on the market capitalisation of its equity, total debt and cash, stood at $755.3 million. Oyo said that it spent over Rs1,500 crore on several beneficiary schemes for employees.
Oyo Homes &Hotels is reportedly planning to acquire equity in coffee chain Cafe Coffee Day. It is said to have entered into a non-disclosure agreement with the coffee chain.