OYO Request Tourism Ministry To Cancel Membership

On March 12, the most prominent travel tech platform OYO requested the tourism ministry to probe the functioning or membership of the Federation Of Hotel & Restaurant Association Of India (FHRAI). The representatives of OYO allege that FHRAI’s actions are detrimental to small hotel owners. 

In addition, the company also urged the tourism ministry to take necessary actions against FHRAI’s illegally run executives committee and its members who work for self-interest rather than the interest of the small hotel owners. OYO, a new-age technology platform, has reshaped the short-stay accommodation space since 2012. 

In fact, the company also made its commendable place in the unlisted share market and made OYO unlisted shares worth buying for potential investors to get a high ROI. In this write-up, we will cover everything about the ongoing tussle between OYO and the FHRAI. Stride along with this blog till the end. 

Tussle Between OYO And FHRAI

The travel tech unicorn OYO has asked the Ministry of Tourism to cancel its membership in the FHRAI executive committee, claiming that the members of the committee work for their interests. When the team reached out for a response, FHRAI Secretary General Jaison Chacko told PTI that it would have been desirable if OYO had tried to counter FRHAI’s allegations and tried to clear the pending dues of hundreds of hotel partners. Additionally, he said FHRAI had approached potential authorities, including the CCI, NCLAT, NCLT, SEBI, and government, against OYO’s oppressive and unethical business practices. He said that FHRAI had received multiple complaints from its customers about a large-scale breach of contracts, unilateral cancellation of agreements, default of payments, and other fraudulent activities committed by OYO. 

To defend themselves from such allegations, the representative of  OYO  said to the tourism ministry, “Aggregators like OYO have only enabled the industry in India over the last decade, and new age players have democratised travel, made hotels and homes more accessible to guests from around the globe.” It is true because the company has made a big name in the tourism industry. Today, the company expects its revenue in FY23 to be $751 million, up 19% from $629 million in FY22. 

In addition, the company accused the present government body members of FHRAI of running a “deleterious and malicious agenda aimed towards ruining the interest of the hotel industry at large.” This ultimately creates obstacles and bottlenecks for a new player in the market.

FHRAI Had Asked SEBI To Stop OYO’s IPO After CCI Penalty

Some of you might not be aware of the fact that FHRAI asked the Securities and Exchange Board of India (SEBI) in 2022 to halt OYO’s INR 8,430 Cr. IPO. FHRAI alleged that OYO is responsible for the “systematic depredation of the budget segment hotel business” and that its national billing dollar valuation is a cause for concern. In response to this, OYO claimed that the FHRAI is resorting to incorrect sensational statements.  

However, the Competition Commission of India (CCI) imposed a penalty of INR 168.88 Cr on OYO for following unfair business practices. Well, the company is going full steam ahead with its IPO. However, the company recorded losses of INR 333 Cr during the second quarter of FY23, which was down nearly 20% from INR 414 Cr in quarter 1 FY23. Still, the company expects to become EBITDA positive in FY23. Further, OYO said to refile its Draft Red Herring Prospectus (DRHP) with SEBI in the middle of Feb 2023, which could take 2-3 months. In light of this, the market regulators asked the company to refile DRHP by updating all the relevant sections like risk factors, outstanding litigation, KPIs, the basis for offers, and many more. 

With the determination to have a positive EBITDA, OYO unlisted shares become a worthy investment for any potential investor who wants to raise wealth in the future. However, when buying unlisted shares, you must contact the top unlisted share brokers in India to simplify your buying process. 

Are you willing to invest in OYO unlisted shares or any other unlisted shares in India? Count on Stockify to make your buying process easy. Stockify is one of the best-unlisted share trading platforms in India helping potential investors with the right investment. From technology to healthcare, manufacturing, retail, finance, and many others, Stockify has everything under a single roof. Further, they have a team of brokers who are always ready to give you assistance on unlisted shares and guide you throughout the buying process. They provide you with information about every pre-IPO company such as revenue growth, EPS growth, EBITDA, etc. In addition, they also make your KYC verification and share transfer a duck soup process. You can also get regular prices and other updates from Stockify. The experts update the prices based on market fluctuations along with other key performance indicators. So, connect with Stockify today.