Hotel booking firm Oyo on September 22 rejected SoftBank’s valuation markdown and dubbed it ‘patently incorrect’.
The SoftBank-backed firm released a statement to uphold the increase in its gross booking value this financial year after the Japanese investor cut the IPO-bound Indian start-up's valuation by about 20 percent to $2.7 billion. SoftBank Group Corp, which is the largest shareholder in the hotel-booking firm, cut its estimated value for Oyo in the June quarter from an earlier $3.4 billion.
Explaining why there is no rational basis for a markdown, Oyo said: “Confident that speculations about the valuation markdown is patently incorrect. Valuation is an outcome of business performance. As per our latest audited results, we have clocked Rs 7 crore maiden adj EBITDA profit in the June quarter, at 41 percent gross profit margin and a 45 percent increase in gross booking value per hotel per month vs the last financial year. These are the dramatically improved results and the strong performance trajectory is expected to continue.”
Reacting to speculations that Oyo is targeting an early 2023 IPO at a $5 billion valuation, the company said: “We have not decided the exact timing for the IPO and the IPO valuation is also highly speculative.”According to a Bloomberg report, the hotel-booking company filed fresh financial documents on September 19 and is now targeting an initial public offering in early 2023 provided that India’s stock market continues to hold up and economic conditions improve, according to people familiar with the matter.