Oravel Stays Limited filed its Draft Red Herring Prospectus (DRHP) with SEBI in September 2021, which was later returned by SEBI in January 2023 for updates; the company has since filed updated financial information.12 August 2026Travel & Hospitality Tech · 8 min read

OYO (Oravel Stays) — Pre-IPO Research Report

Oravel Stays Limited

Oravel Stays Limited, operating under the brand OYO, is an Indian hospitality technology platform that primarily partners with hotels and homeowners to offer budget accommodation. The company has been in the spotlight due to its evolving business model and reported shift towards profitability, making its potential public listing a significant event for the Indian tech and hospitality sectors.

Founded

2012

Headquarters

Gurugram, India

Founder & Group CEO

Ritesh Agarwal

Number of storefronts (FY23)

Approximately 1.7 lakh storefronts globally, per company press releases.

What the company is (and how it makes money)

OYO operates an asset-light, tech-enabled platform connecting hotel partners and homeowners with travellers.
It primarily offers budget and mid-segment accommodation across various brands like OYO Rooms, OYO Townhouse, and Collection O.
The company's revenue model has evolved to focus on a franchise-heavy, revenue-share basis, moving away from its earlier minimum guarantee or leased model.
It provides technology solutions for property management, pricing, and distribution to its partner hotels.
OYO also offers vacation homes and long-term rental solutions in certain markets.
Revenue is primarily generated through commissions or revenue share from bookings facilitated through its platform.

Financial snapshot (officially disclosed only)

For the fiscal year ended March 31, 2021, Oravel Stays Limited reported consolidated revenue from operations of INR 3,961.64 crore and a net loss of INR 3,943.88 crore, per the DRHP filed with SEBI.
For the fiscal year ended March 31, 2022, consolidated revenue from operations was INR 4,781.3 crore, with a net loss of INR 1,892.8 crore, as per updated financials submitted to SEBI.
The company has publicly reported achieving adjusted EBITDA profitability for Q3 FY23 and a net profit of INR 16 crore for FY23, per company press releases.
For the first three quarters of FY24 (April-December 2023), OYO reported a net profit of INR 30 crore, per company press releases, indicating a sustained positive trend.

The moat

**Brand Recognition & Network Effects:** OYO has built significant brand awareness in the budget hospitality segment, attracting both travellers and property owners, creating a two-sided network effect.
**Technology Platform:** Its proprietary technology for property management, dynamic pricing, and distribution helps optimize occupancy and revenue for partner hotels, making it attractive to owners.
**Asset-Light Model:** The current franchise-based model reduces capital expenditure and operating risks compared to traditional hotel chains or its earlier leased model, allowing for faster scaling.
**Data Analytics:** Extensive data on traveller preferences and property performance allows for targeted marketing and continuous improvement of its offerings.
**Supply Density:** A high density of properties in key locations provides convenience and choice for travellers, enhancing its value proposition over competitors with sparser networks.

Where it is in the IPO pipeline

Oravel Stays Limited filed its DRHP with SEBI in September 2021 for an IPO of INR 8,430 crore, comprising a fresh issue of INR 7,000 crore and an Offer For Sale (OFS) of INR 1,430 crore.
SEBI returned the DRHP in January 2023, asking the company to update and refile its financials and other disclosures.
The company subsequently submitted updated financial information to SEBI, reflecting improved financial performance and a path to profitability.
The IPO structure, as per the initial DRHP, aimed to use fresh issue proceeds for debt repayment, organic and inorganic growth initiatives, and general corporate purposes.
The timeline for the IPO remains subject to SEBI's final observations and market conditions, with no firm date officially announced.

What most investors miss

**Shift in Business Model & Revenue Recognition:** The transition from a minimum guarantee/leased model to a pure franchise/revenue-share model significantly alters revenue recognition and cost structures. Investors should scrutinize how this change impacts reported profitability and cash flows, particularly the sustainability of owner relationships.
**Owner Churn and Partner Economics:** While an asset-light model reduces OYO's direct risk, the success heavily depends on retaining hotel partners. High churn rates, if any, or disputes over revenue share can impact supply stability and brand reputation. The DRHP will detail any historical churn.
**Unit Economics of Newer Cohorts:** It's crucial to understand if the unit economics (revenue per available room, commissions, operating costs) of properties onboarded in the post-pandemic, franchise-heavy era are better and more sustainable than those from its earlier aggressive expansion phase. The DRHP should offer cohort data if available.
**Related-Party Transactions:** Given the complex corporate structure and prior funding rounds, investors should meticulously review related-party transactions disclosed in the DRHP for any potential conflicts of interest or unusual financial arrangements.
**Impact of Regulatory Changes:** The hospitality sector is subject to various local and national regulations (e.g., licensing, safety standards). Any adverse changes or increased compliance burden could impact OYO's operations and profitability, especially for its diverse network of small hotel partners.
**OFS vs. Fresh Issue Dynamics:** The initial DRHP included a significant OFS component. Understanding which existing investors are selling and the proportion of fresh issue to OFS is crucial to gauge capital infusion for the company versus liquidity for early investors.

Red flags and what to scrutinise

**Historical Losses and Path to Sustained Profitability:** While OYO has reported recent profitability, its history includes significant losses. Investors must assess the sustainability of this turnaround, the drivers of profitability, and whether it can withstand competitive pressures and economic downturns.
**Regulatory Scrutiny and Disputes:** OYO has faced past disputes with hotel partners and regulatory scrutiny in various markets regarding contracts, commissions, and service quality. The DRHP will list ongoing legal proceedings and contingent liabilities.
**Seasonality and Demand Volatility:** The hospitality sector is inherently seasonal and highly susceptible to economic downturns, health crises (like the pandemic), and travel restrictions, which can significantly impact occupancy rates and revenue.
**Intense Competition:** OYO operates in a highly competitive market against traditional hotel chains, online travel agencies (OTAs) like MakeMyTrip and Goibibo, and other budget accommodation providers. This competition can limit pricing power and growth.
**Key Man Dependence:** The company's vision and strategy have been closely associated with its founder, Ritesh Agarwal. Any changes in leadership or strategic direction could pose risks.
**Accounting Policies for Revenue Recognition:** Given the complex and evolving business model, particularly the shift to a franchise-based approach, investors need to thoroughly understand OYO's revenue recognition policies and any changes therein, as detailed in the DRHP.

How to evaluate it (a diligence checklist)

**Thoroughly review the updated DRHP:** Pay close attention to the detailed financial statements, segment reporting, risk factors, and management discussion and analysis for the latest fiscal periods.
**Analyze the balance sheet for contingent liabilities:** Scrutinize any outstanding legal cases, regulatory penalties, or guarantees that could impact future financial performance.
**Examine the use of IPO proceeds:** Understand exactly how the funds from the fresh issue will be deployed and evaluate if these allocations align with the company's stated growth strategy and debt reduction plans.
**Assess corporate governance disclosures:** Review the composition of the board, independence of directors, related-party transaction policies, and overall governance framework outlined in the DRHP.
**Evaluate the sustainability of current profitability:** Look for detailed breakdowns of revenue streams, cost structures, and operational efficiencies that are driving the reported profits to determine their durability.
**Understand the competitive landscape and market share:** Compare OYO's strategy, market positioning, and growth prospects against its key competitors in India and globally, as presented in the industry section of the DRHP.

Official references

SEBI - Draft offer documents & public issues SEBI - Securities and Exchange Board of India NSE India - listings & filings BSE India - listings & filings MCA - company master data & financial filings

The Oravel Stays Limited Draft Red Herring Prospectus (DRHP) on the SEBI website
Company press releases and investor presentations on OYO's official investor relations page
Audited financial statements filed with the Ministry of Corporate Affairs (MCA)

Frequently asked questions

What is OYO's primary business model now?

OYO primarily operates an asset-light, franchise-based model, partnering with hotel owners and homeowners to offer budget accommodation and vacation homes, while providing them with technology and distribution support.

Has OYO achieved profitability?

Yes, OYO has publicly reported achieving adjusted EBITDA profitability for Q3 FY23 and a net profit of INR 16 crore for FY23, and INR 30 crore for the first three quarters of FY24 (April-December 2023), per company press releases.

What is the status of OYO's IPO?

OYO filed its DRHP with SEBI in September 2021, which was subsequently returned by SEBI for updates. The company has since submitted updated financial information, and the IPO process is awaiting SEBI's final observations.

How does OYO generate revenue?

OYO primarily generates revenue through commissions or a revenue-share model from bookings facilitated through its technology platform for its partner hotels and homeowners.

What are the key risks associated with OYO?

Key risks include the sustainability of its recent profitability, intense competition in the hospitality sector, potential for owner churn, regulatory scrutiny, and the inherent seasonality and demand volatility of the travel industry, all detailed in its DRHP.

This report is prepared by Neoma Capital for information and investor-education purposes only. It is not investment advice, a recommendation, or an offer to buy or sell any security. Unlisted and pre-IPO shares are illiquid, high-risk and may never list. Any figures mentioned are only those officially disclosed by the company, SEBI, the stock exchanges or the MCA, and may change. Neoma Capital does not guarantee accuracy or completeness. Verify everything independently from official sources and consult a SEBI-registered adviser before making any decision. Neoma Capital, 12 August 2026.