Is OYO’s turnaround for real?
Even as the chorus of the company’s turnaround seems to be gathering momentum, it appears that co-founder Ritesh Agarwal’s one-trick pony continues to be financial engineering.
Why read this story?
Editor's note: It has been a season of lots of good news for OYO. Earlier this week, Business Standard reported that the budget hotel operator is looking to raise $200 million at a valuation of $4.5 billion or upwards. A couple of weeks back, OYO said it is acquiring G6 Hospitality, the company that owns the Motel 6 and Studio 6 chain of budget hotels in the US. In an all-cash deal, OYO is buying the hotel franchisee business from private equity firm Blackstone’s real estate arm for $525 million.
Just a few weeks before this, OYO announced that it has raised $175 million in equity funding from a clutch of investors, led by co-founder Ritesh Agarwal’s Patient Capital—which brought in most of the money—at a valuation of $2.5 billion. Also, around this time, the company said it recorded its first-ever net profit in the fiscal year ended March 2024.
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