The OYO IPO Explained

**SPEAKER_1** (0:01)
Hello folks, you're tuned in Finshots Daily. In today's episode, we break down OYO's latest IPO attempt and explain why the company hitting the public markets looks nothing like the one that you remember.
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Now, back to the story.
Okay, few Indian startups have enjoyed a journey quite as dramatic as OYO. Launched back in 2013 as a quirky budget hotel aggregator, the company's initial playbook was pretty simple. Paint the town red. Literally. OYO went on a hyper-aggressive expansion spree, slapping its red and white logo on thousands of independent guest houses and budget hotels across India. Before long, it replicated this massive, blood-scaling model overseas, expanding into Southeast Asia, Europe and the US, briefly becoming one of the world's largest hotel chains by room count. Then reality hit. Mounting disputes with disgruntled hotel partners and a pandemic that brought global travel to a grinding halt meant the company found itself battling massive operational losses until as recently as 2023 As a result, it was forced to shelf its highly anticipated IPO and head back to the drawing board. Fast forward to today, and OYO is back for a second round at the stock market. But if you look closely at its draft prospectus, you will quickly realize that this is a completely mutated beast.
In fact, it is barely even an Indian business anymore because only around 20% of OYO's revenue last year originated from India. A massive chunk of this international shift is thanks to its aggressive global footprint and specifically its recent acquisition of G6 Hospitality, the massive US operator behind the iconic Mortal 6 and Studio 6 lodging chains. And that's not the only unusual thing about this listing. Usually, when a high-profile startup goes public, the founders pitch a grand narrative about chasing growth, entering new markets or building futuristic tech. OYO isn't doing that. Instead, it is using the bulk of the public's money to clean up its house. For context, out of its massive proposed fresh issue of 6,650 crore rupees, the company has earmarked a warping 4,987 crore rupees purely to repay the debt it took on to acquire G6 hospitality. To put that into perspective, how massive this financial engineering move is, the fresh issue itself is actually larger than OYO's entire net worth, which stood at 6,146 crore rupees as of December 31st, 2025 Now, this brings us to the ultimate question on every investor's mind. Is OYO actually a good business now? If you look at the profitability metrics, OYO was bleeding cash not too long ago, reporting a loss of about 1,286 crore rupees in FY23. But then in FY24, it swung into the green, scraping a profit of 229 crore rupees, which ticked up to 245 crore rupees in FY25. The momentum seemed to be compounding too. During just the first 9 months of FY26, OYO's profits surged to an impressive 748 crore rupees. But how did a company that was structurally unprofitable for a decade suddenly start minting money? Well, it wasn't because revenues went through the roof. It happened because of 3 main things.
One, it slashed its employee costs by more than half from around 1548 crore rupees in FY23 to about 600-700 crore rupees from FY24 onwards. At the same time, its gross profit margin expanded from 42.6% in FY23 to nearly 61% in the first 9 months of FY26. That is 9 months, FY26. OYO proudly claims this margin profile is now among the highest in the entire listed hospitality sector. An even more meaningful metric that supports this is adjusted EBITDA or operating profit margin. Back in FY23, OYO's adjusted EBITDA margin was 5% of revenue. By the first 9 months of FY26, that figure had climbed to 28.35%.
What's even more surprising is how OYO stacks up against some of the world's biggest travel platforms. Measured as a percentage of GBV, that's gross booking value, OYO reported an adjusted EBITDA margin of 8.6%, comfortably ahead of booking.com at 5.4%, Airbnb at 5%, Make My Trip at 2%, and Tibiotek at 1.1%.