OYO IPO SEBI: The Federation of Hotel and Restaurant Association of India (FHRAI) has once again appealed to the stock market regulator SEBI not to approve the initial public offer (IPO) of hospitality firm OYO. The association said that SoftBank-invested OYO has suffered huge losses in recent years. In such a situation, he should not be allowed to bring this IPO.
FHRAI has also said that Oyo had a loss of Rs 3,943.84 crore in FY 2021, which means that the company lost Rs 76,077 per minute. Actually Oyo was launched in 2013 and since then it is running in loss.
loss to the company
The turnover of the company was Rs 13,413 crore in the year 2020, which came down to Rs 4157 in the year 2021. The association told SEBI that OYO’s IPO would sink the money of common investors and only its founders and management would become rich through the public offer.
Although this is not the first time. FHRAI has earlier also objected to OYO’s Draft Red Herring Prospectus (DRHP) over insufficient disclosures and alleged incorrect data.
The association’s vice-president Gurbakshsinh Kohli has said that apart from adopting business methods that eliminate competition, OYO is a company that has been making losses since its inception. It may have raised a lot of money from investors and is seen as one of the most promising startups in the country, but the reality is that it has done nothing to effectively handle its business on the ground.
He has also said that OYO also has the largest reserves of ESOP (Employee Stock Option Program), whose value has been stated as $ 1.1 billion. This is ridiculous. Apart from the company’s poor financial health and losses, it should also be noted that the Competition Commission of India is investigating against it for adopting anti-competition methods.
Hotel dues have not been paid.
Gurbaksh Singh Kohli has also claimed that as of today, it has been reported that OYO does not run a single hotel. Hotels have ceased to operate and have been reduced to an online travel agent. The hospitality industry is aware of OYO and as its voice, FRHAI wants to caution people and urges SEBI to withdraw its IPO.”
Meanwhile, in view of the ongoing volatility in the market, Oyo has gone ahead with the plan to bring its IPO for the time being. Oyo had filed draft papers with the market regulator in October last year.
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