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Summary: After two unsuccessful attempts, OYO seems to be finally gearing up for its IPO. However, before you consider investing, here’s a deep dive into the company’s financials and performance.
After unsuccessful attempts in the past, OYO is finally expected to go public. Ahead of its listing, the company is selling investors a simple claim: after a decade of losses, it is finally making money. While the statement is true, headline profits don’t tell the whole story.
When someone says ‘OYO’, most people assume cheap, standardised rooms booked via a few clicks on a phone. However, things stand differently today. After a valuation of nearly Rs 70,000 crore in 2019, what followed was the pandemic, empty hotels, sharp losses and a 70 per cent markdown by SoftBank, OYO’s biggest banker. Two listing attempts, in 2021 and 2023, went nowhere. Now it is back for a third try.
Why OYO’s listing is happening now
In December 2024, OYO acquired G6 Hospitality, which owns US motel chains Motel 6 and Studio 6, for Rs 4,274 crore. The deal was funded by a five-year dollar loan raised overseas, with the loan value exceeding the deal value. This helped OYO clear an older dollar borrowing from 2021, and Rs 7,757 crore remained outstanding in May 2026, with an effective annual cost of around 13 per cent. There is no offer for sale alongside it, so no shareholder is cashing out.
That refinancing still pays off. Prepaying the loan removes roughly Rs 650 crore of annual interest, over half of OYO's borrowing cost, and lifts next year's profit even without selling a single extra room.
One brand, three businesses
OYO stopped being an Indian company years ago. In 9M FY26, 84 per cent of its revenue came from outside India. The more important question is not where it operates but how it operates, since it earns in three unrelated ways under one name.
In North America, OYO franchises: it lends the Motel 6 and Studio 6 names to owners who pay for the property, staff and local liabilities. In India, it does the opposite, leasing hotels and running them itself under brands such as ‘Townhouse’ and ‘Palette’, keeping the whole room rate but paying rent and wages whether rooms fill or not. In Europe, it lists and manages other people's holiday homes for a cut.
Booking volume, the number OYO quotes most often, is not revenue. Of every Rs 100 booked in North America, OYO keeps about Rs 16. In India, it keeps Rs 41.
What OYO keeps out of every Rs 100 booked, by region
Southeast Asia and the UK dominate the revenue pie, while India and Nepal lag
| Region (9M FY26) | Gross bookings (Rs cr) | Revenue (Rs cr) | Kept per Rs 100 booked |
|---|---|---|---|
| US and Canada | 12,023 | 1,879 | Rs 15.6 |
| Southeast Asia, the UK and others | 4,153 | 2,296 | Rs 55.3 |
| Europe | 4,039 | 1,639 | Rs 40.6 |
| India and Nepal | 2,732 | 1,127 | Rs 41.3 |
| Group | 22,946 | 6,941 | Rs 30.3 |
Keeping less is not worse. G6 takes a smaller cut of each booking, but its asset-light model turns that fee income into a 33 per cent net margin: Rs 344 crore of profit on Rs 1,030 crore of revenue in the nine months. OYO's Indian hotel company keeps a far larger share of each booking, but the cost of running the rooms leaves it with Rs 46 crore, a net margin of about 4 per cent. Both figures come from the respective entity accounts in the prospectus and may not add up to the group total.
Beyond the headline numbers
OYO reported a net profit of Rs 748 crore in 9M FY26. Of that, Rs 559 crore comprises deferred tax credit, an accounting entry rather than money earned. It reflects a decade of past losses that can be set against future tax, a benefit accounting rules let a company book as an asset in advance.
Strip it out, and the group earned Rs 189 crore. Another Rs 3,140 crore of such assets remains, so future profits could be flattered the same way again.
The turnaround was built, and then it was bought
It would be easy to conclude that OYO’s turnaround is an illusion. It is not. The profit is borrowed, but the improvement underneath it is real, and it came first. The line that shows it is adjusted operating profit, which strips out one-off items and other income to measure only what the business earns from running hotels. That was a loss of Rs 1,745 crore in FY21 and a profit of Rs 898 crore in FY24. G6 arrived only in December 2024, so the FY24 figure is OYO's own: it was earning nearly Rs 900 crore a year before the American motels.
Three things drove that recovery. First, costs were cut hard: employee costs fell 57 per cent and general and administrative expenses 28 per cent between FY21 and FY24, as country teams were folded into India-run regional hubs. Second, thousands of low-yield properties were dropped, mostly loss-making economy contracts in smaller Indian cities. Automation did the rest: roughly seven in 10 room nights now come through OYO's own app and website rather than commission-charging travel sites.
Priced for the story, not the business
The price band is not out yet. Prism, as OYO now calls itself, has been meeting institutional investors since late July 2026, asking for a valuation said to be near Rs 70,000 crore. Add the Rs 6,579 crore net debt and the enterprise value comes out to Rs 76,600 crore.
The test that matters is what the hotels actually earn: adjusted operating profit, about Rs 2,624 crore scaled to a full year. One thing is missing from it: rent. OYO now runs 1,573 hotels in India itself, up from four in March 2023, and leases most of them. Accounting rules park those payments below the operating line, but the landlord gets paid whether rooms fill or not, and the cash is real, Rs 702 crore in nine months. Put a full year of it back, and the business earns about Rs 1,690 crore; that’s about a 45 times EV / EBITDA multiple.
US hotel franchisors Wyndham trade at about 16 times on the same measure, Choice Hotels at about 12. Even India's five largest listed hotel companies trade at an average of 22 times, making the speculative valuation rich.
What lies ahead
OYO has earned its recovery. It has not yet earned the valuation attached to it. The hard part is behind it. The harder part, making the rest of the group earn the way the American motels do, is not. The price band will settle what that promise costs, and whether investors are paying for the growth OYO has already banked, or the growth it still has to earn.
Also read: How to win the IPO game: IPO handbook
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