The federation’s statement said that, as per reports, Oyo incurred losses of Rs. 3943.84 crore in FY20-21. This translated to a loss of over Rs. 76,077 every minute, it said.
Oyo’s IPO has been delayed due to market volatility, ETtech reported.
Oyo has been losing money since its inception in 2013, and its total revenue has dropped by 69% from Rs 13,413 crore in 2020 to Rs 4,157 crore in 2021.
FHRAI has cautioned that Oyo’s IPO will wipe out public wealth while enriching its founders and key management.
FHRAI had previously raised concerns about significant inaccuracies and inadequate disclosures in Oyo’s Draft Red Herring Prospectus (DRHP).
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“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 as it should,” said Gurbaxish Singh Kohli, vice president, FHRAI.
FHRAI had previously filed a complaint with Sebi alleging Oyo’s tax evasion. The Directorate General of GST Investigation (DGGI) has filed a case of GST/service tax evasion against Oyo and its subsidiaries.
FHRAI has also pointed out that there are a number of FIRs against Oyo registered under Sec. 420, 406, and 409 of the IPC, some of which are grievous economic offenses entailing a maximum punishment extending up to life imprisonment. “In view of the aforesaid, we request the SEBI to suspend the IPO process to protect the interests of all stakeholders as well as the general public,” Kohli said.
