SEBI rejected OYO’s draft IPO Documents

OYO IPO Documents Rejected: The initial public offering (IPO) of Oravel Stays, the parent company of hospitality chain Oyo Hotels, could hit the market by the last quarter of this year after the Securities and Exchange Board of India (Sebi) issued a resubmission order. increase. A draft of Red Herring’s prospectus (DRHP) has been amended, sources said.

Sebi rejects Oyo’s draught IPO documents and requests that they are resubmitted with specified modifications

The market regulator announced on its website on Tuesday that it will return the offer documents on December 30, 2022, with a notice to resubmit relevant updates and revisions.

“The previous plan was to launch his IPO between April and July 2023, but now there may be delays due to the process and the IPO will be pushed forward by this year’s Diwali. expected, depending on market sentiment, one source said.

The company’s issuance size may also be reduced in response to new valuation and liquidity needs.

According to its first filing in September 2021, Oyo Hotels was to raise 8,430 kroner consisting of a new share issue worth 7,000 kroner and an offer to sell (OFS) of up to 1,430 kroner. “The company has submitted several amendments to the DRHP over the past year as cash burn has improved and litigation and risk have decreased. We wanted to share an update on our previous earnings with our investors. For all these updates, Sebi has asked the company to resubmit its bidding documents,” the source said.

Market watchdogs have asked the company to resubmit updated key performance indicators (KPIs), risk factors, bid price parameters, and other key disclosures, people familiar with the matter said.

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According to Sebi’s website, Oyo Hotels submitted two addenda with additional information in September and November last year. The company had reported that its revenue for the fiscal year 2021-22 (FY22) was Rs 4,905 billion, up 18% year-on-year. In addition, the company nearly halved its FY22 loss from Rs338.25 billion in FY21 to Rs189.22 billion.

“This is one of the few instances where Sebi returned his DRHP with advice to resubmit an update. The DRHP was neither withdrawn by the company nor rejected by Sebi. As such, DRHP is still in existence and the company cannot raise new funds unless disclosures are made regarding pre-IPO placements in DRHP,” said Anil Choudhary, partner at Finsec Law Advisors. I’m here.

It is worth noting that Sebi Chairman Madhabi Puri Buch said at his final board meeting on December 20 that the regulator was sending the papers back to commercial banks repeating the same mistakes.