CEO of Oyo: We Don’t Currently Need Access to Capital

Despite reports of a public offering in limbo and more potential private investment, the CEO of Oyo said Wednesday the company has no need to raise more money right now. 

“My view is that, at this point of time, we don’t need access to capital from either the public markets or the private markets,” said Ritesh Agarwal, CEO of Oyo, at the Skift India Summit. “Currently, our focus is just delivering good earnings results, and so on.”

Oyo — primarily a budget hotel operator and aggregator — has been profitable for the past couple of quarters and is generating cash flow, he said. 

“Our continued job is that we generate more cash, deliver, make sure that shareholders have great returns,” Agarwal said. “Whenever the board feels that the markets are right for them to consider public offering, we will be ready to go out.”

Oyo first filed for an IPO in 2021 and then reduced the size of the offering a year ago. In January, Bloomberg reported that Oyo was in discussions with the Malaysian sovereign wealth fund for funding. And in February, Oyo denied a report by the Economic Times that it wanted to back out of the public offering. 

Agarwal said the company is focused on strengthening its finances and increasing bookings. Oyo paid $200 million toward its debt recently, he said. 

Business Expansion 

Oyo has raised hundreds of millions of dollars in equity and debt over the years. Much of that has gone toward rapidly expanding different sectors of the business and building operations software products that it provides to hotel owners. 

Most recently, Oyo accepted a ​​$24 million loan from JP Morgan to spur growth of its accelerator program, which is meant to support first-generation hoteliers.

Oyo last year entered the premium resorts and hotels category with the launch of a brand called Palette. And in January, the company said it plans to add 400 properties in popular religious destinations by the end of the year. 

Oyo also has a growing short-term rental business in Europe that includes 80,000 homes in several countries, according to Agarwal.

Agarwal still wants Oyo to continue growing, but he said that comes after ensuring they can deliver in three top areas: customer satisfaction, the business relationship with owners, and satisfactory margins. 

“To the extent these three are there, we want to grow as quickly as we can,” Agarwal said. “If these three are not there, we’re happy to take a pause and take our time before we start growing again.”

Editor’s Note: The headline of this article was updated to make more clear Oyo CEO Ritesh Agarwal was referring to current financing needs.