IPO-bound OYO sees US and China grow – Community News
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IPO-bound OYO sees US and China grow

IPO-bound OYO has decided to focus on core markets and other markets such as China and the US, the company said in a filing with the market regulator.

The company said it plans to launch an IPO of $1.2 billion.

Despite the impact of COVID on operations, the company had grown to more than 1.5 lakh storefronts during the pandemic – an industry term for hotels, homes, residences and rooms. In pre-pandemic times, OYO had expanded into all major markets, but after COVID, the company quickly shifted its focus to its core growth markets where it already had a large presence.

It also looks at emerging opportunities in emerging markets such as China and the United States.

According to the draft prospectus of OYO’s red herring, such markets exhibit similar characteristics to major growth markets and are ripe for technology disruption.

The company said its proven strength and established market position would drive measured growth in these markets.

According to the DRHP, while OYO’s previous business model focused on fixed revenue commitments to customers, it now aims to reduce the number of such contracts to close to zero.

As a result, more than 99% of its storefronts are out of contracts with minimum guarantees or fixed payout commitments.

All investments, capital expenditures, in-store personnel costs or operational costs are incurred by the property owners or operators, making the business more capital efficient.

Recent changes have accelerated technology adoption across the board.

It now manages almost all of its interaction with business partners through online modes and technology-based marketing channels such as the OYO Saathi reseller model and the OYO 360 self-signup model.

According to the DRHP, such factors have contributed to a rapid expansion of the company’s network and have expanded the store offering in a cost-effective and scalable manner.

Investments in building technology have enabled further automation and improved quality of service to its customers, contributing to an improvement in the unit economy, which grew from 5.1% in FY20 to 18.4% in FY21, according to the DRHP.