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Business EconomyPosted at: May 11 2022 6:36PM


FHRAI urges SEBI to call of Oyo’s Rs 8430 cr IPO

Mumbai, May 11 (UNI) The Federation of Hotel & Restaurant Associations of India (FHRAI) on Wednesday said it has once again urged the market regulator SEBI to call off hospitality unicorn Oyo's Rs 8430 crore initial public offering saying that the public issue will only wipe out public wealth.
In a representation to the Securities and Exchange Board of India (SEBI), FHRAI has stated that the hotel rooms aggregator has been suffering massive losses in the recent years.
FHRAI had previously objected to gross misstatements and inadequate disclosures contained in the Draft Red Herring Prospectus (DRHP) filed by Oyo.
Oyo has filed draft papers with the capital markets regulator for the company’s Rs 8,430-crore IPO.
"Since its inception in 2013, Oyo has been running in losses and its total turnover fell a drastic 69 per cent from Rs 13,413 crore in 2020 to Rs 4,157 crore in 2021. FHRAI has cautioned that Oyo’s IPO will only wipe out public wealth while enriching its founders and key management," the association said in a statement issued here.
Earlier, FHRAI has also filed a complaint with the SEBI stating Oyo’s tax evasion. The Directorate General of GST Investigation (DGGI) had filed a case of GST or service tax evasion against Oyo and its subsidiaries.
"In addition to engaging in anti-competitive business practices; Oyo is a company that has consistently registered losses since its inception. It may have raised a lot of money to become touted as one of India’s most promising start-ups but it hasn’t done enough to manage the business on the ground as efficiently," Gurbaxish Singh Kohli, Vice President, FHRAI said.
The association claimed that Oyo is being investigated for anti-competitive practices by CCI, while its CIRP proceedings are being heard by Supreme Court.
"Oyo has failed in running and operating hotels and used Covid as a pretext to walk out of 100s of hotels with whom they had MSA Agreements and they have not cleared dues of these small hapless hoteliers," he said.
Kohli further noted that the hospitality industry is wary of Oyo and as its voice, FHRAI wants to caution the public and urges the SEBI to call off its IPO.
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