OYO’s $8 Billion IPO Bid: Is the Hospitality Giant Ready for Dalal Street’s Big Test?

OYO’s parent company, Oravel Stays Limited, is a global hospitality player whose swooping IPO, eyed for a $7-8 billion valuation, is only months away from finally joining Dalal Street’s main stage. Early indicators say momentum is picking up, with its share in the pre-IPO market hovering around ₹70-75 a share, suggesting confident - but not euphoric - demand. With eyes on profitability, turnaround, and global ambition, this blog aims to break down OYO’s business, unpack what the IPO offers, and highlight the real strengths and risks, so both first-time investors and seasoned market pros walk away fully informed.

OYO’s Business Model

OYO isn’t just a hotel booking engine - it’s a tech-powered connector between small hotel owners (“patrons”) and travelers (“guests”), much like a matchmaker for the stay world. It is like a company that helps unbranded, fragmented hotel assets become clean, standardized, and discoverable on apps and websites. OYO’s software and branding tools let local hotel owners manage their rooms efficiently while travelers get more affordable stays. In return, OYO earns royalties - a fancy word for a share in hotel earnings. They keep expanding: short-term rentals, vacation homes, and now food services via Townhouse Cafe QSRs. Most of OYO’s employees work in India, but their reach spans the US, Europe, Southeast Asia, and over 35 countries.

OYO IPO Timeline: The Stops and Restarts

OYO’s IPO journey has bounced between hope and hesitation, often dictated by investor mood, market conditions, and regulatory feedback:

• Oct 2021: OYO’s first IPO application is submitted - but gets returned by SEBI in Jan 2023.
• May 2024: Second time withdrawn, citing weak conditions and a pending funding round.
• Oct 2024: Planned IPO postponed again after SoftBank asks for stronger earnings before listing.
• Aug 2025: News breaks of board meetings and discussions with investment banks (Axis, Citi, GS, ICICI, JM, Jefferies) to finalize strategies.
• Expected Nov 2025: Final refile/filing of DRHP, targeting $7–8 bn. Pre-IPO market signal investor anticipation, but the board’s green light is still awaited.

Strengths

• OYO turned from losses to a ₹623 crore net profit in FY25, so for every ₹100 in revenue, the company sees a ₹17-18 return at EBITDA margin levels.
• Revenue outside India is nearly 78%; over 22,700 hotels and 1.19 lakh homes are listed worldwide.
• A two-sided platform, OYO empowers small hotel owners with apps to run their businesses, while guests access affordable rooms quickly.
• OYO bought back ₹1,650 crore of debt, refinanced for projected annual savings of ₹125–145 crore, and trimmed expenses by 16% in FY24.
• Premium Upgrades: Expansion into high-touch brands (SUNDAY, Palette, Townhouse O) and QSRs bolsters margins.
• Recent Major Acquisitions: Motel 6, Studio 6 (US), and Checkmyguest (France) boost reach and EBITDA by over ₹2,000 crore projectively.

Risks

• Unresolved legal tiffs, including a ₹168.8 crore CCI penalty, ₹54.39 crore service tax disputes, and ongoing GST cases, could eat into profits.
• Finance costs tally ₹843.82 crore; vulnerable to currency swings - a 5% move could hit profits by ₹399 crore.
• Several group companies (subsidiaries) have eroded net worth, needing letters of support to stay afloat.
• Internal controls flagged for privileged access in accounting, as per FY24 annual report - not good for data integrity.
• IPO Delays Erase Certainty: Three postponements hint at strategic ambiguity and dependency on majority investor moods.

Want a deeper look at OYO’s IPO specifics, offer details, and real-time updates? Visit the dedicated OYO IPO page for fresh analysis and actionable investor insights.

IPO Valuation: Big Money, Big Debate

Reports peg OYO’s IPO at a head-turning $7-8 billion, with the price band at ₹70 apiece - translating to about 25-30 times EBITDA. But let’s check the context. Private equity valuations plunged from a high of $9.6 billion in 2021 to as low as $2.38-3.8 billion in the private rounds of 2024-25. Some say the rebound is justified; others warn the multiples look stretched next to other listed hotel chains, which usually trade below these levels. It’s a test of faith in OYO’s international assets, tech model, and promise of future profits.

The People Powering OYO

At OYO’s helm stands Ritesh Agarwal, one of India’s most recognisable startup faces - a homegrown prodigy now a judge on Shark Tank India. His story is a rare blend of youthful hustle and big vision: he took the company global before his 30s, bagged Entrepreneur of the Year awards, and is famed for hands-on involvement (even personally leading several fundraises, including $175 million via his Singapore-based Patient Capital fund). Ritesh has weathered setbacks, from early legal disputes with Zostel to multiple DRHP withdrawals, yet always stayed central to OYO’s narrative.

Backing Ritesh is a board stacked with sector heavyweights: Aditya Ghosh, formerly Indigo Airlines President, brings aviation-level operational discipline. Bejul Somaia, Deepa Malik (Padma Shri and Paralympian), Troy Alstead (ex-Starbucks COO), and William Steve Albrecht (risk management expert) round out a board that anchors OYO across hospitality, tech, and governance.

Recent leadership changes include Sonal Sinha, who stepped up to CEO of G6 Hospitality after OYO’s $525 million buyout of Motel 6. Sinha joined OYO a decade ago and is known for finance and operational prowess in international markets - a crucial trait as OYO eyes expansion in North America. The finance squad is also reinforced by Rakesh Kumar, now CFO and General Counsel, ensuring global compliance and savvy strategy.

OYO’s promoter, RA Hospitality Holdings, keeps a tight grip, holding over 43% equity and the lion’s share of preference shares. Their role is more than financial - it’s stewardship through every boom and bump, more so as OYO switches gears from a cash-burning upstart to a profit-first global platform.

Final Take

OYO’s IPO story is shaping up to be one of the most watched events of the year, promising not just a substantial market debut but potentially setting new benchmarks for India’s hospitality and tech sectors. With an ambitious $7-8 billion valuation in sight and a DRHP filing slated for November, OYO is signaling strong intent and confidence in its global growth and turnaround narrative. As the company aligns innovative technology with robust operational discipline, investors must weigh the undeniable strengths against ongoing risks, legal tangles, and market uncertainties. Whether OYO can truly deliver on its IPO hype will depend not just on numbers but on leadership’s ability to sustain profitability and agile expansion in a competitive international arena. Those tracking India’s next-generation IPOs will do well to watch this one closely-OYO could redefine what’s possible for ambitious, tech-led enterprises on Dalal Street.

Disclaimer

Source: Oravel Stays Limited's DRHP, Annual Report. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.