In an internal employee town hall on Thursday, OYO shared some exciting news with its staff: the company has turned cash flow positive in the fourth quarter of the financial year 2023. Here's what you need to know about OYO's latest developments and its plan to repay its debt using IPO proceeds.
Positive Cash Flow in Q4 of FY23
According to an internal presentation, OYO ended the fourth quarter with a surplus cash flow of Rs 90 crore. Sources close to the company say that this positive trend is expected to continue into the first quarter of financial year 2024.
Increase in bookings across key geographies
OYO attributes its positive cash flow to an increase in bookings across all key geographies. The Europe home business, in particular, is seeing a surge in advance bookings for both the upcoming peak summer season as well as the relatively off-season period from November to March.
Refiled Draft Red Herring Prospectus (DRHP)
In March, OYO refiled its Draft Red Herring Prospectus (DRHP) with the stock market regulator SEBI under the pre-filing route. People close to the company have said that the issue size has likely been reduced to $400-600 million, consisting entirely of freshly issued shares with all the proceeds going to the company.
Repaying Debt with IPO Proceeds
OYO plans to use the proceeds from its IPO to repay most of its debt. The company's cash corpus on the balance sheet is currently Rs 2700 crore.
Founder's Optimistic Projections
During a town hall meeting last month, OYO founder Ritesh Agarwal projected that the company could post adjusted earnings of nearly Rs 800 crore before interest, tax, depreciation, and amortization in the upcoming financial year 2024. He also shared that the company was taking measures to keep a "healthy" cash runaway and was continuing to operate in a "cost-effective" way.
Expected Revenue for FY23
OYO's revenue for financial year 2023 is expected to be more than Rs 5,700 crore, up 19% from the Rs 4,780 crore it posted in financial year 2022.
Investing in OYO Unlisted Shares
With OYO's positive cash flow and plans to use the IPO to repay debt, investors may be considering buying OYO's unlisted shares. However, it's important to do your own research and consult with a financial advisor before making any investment decisions, as unlisted shares are very risky.