OYO Rooms, one of India’s largest hospitality chains, has garnered significant attention among investors, especially in its unlisted shares segment. With the company gearing up for an IPO, many are considering investing in their unlisted shares currently trading at [View Latest Price of OYO Unlisted Shares] to potentially benefit from early-stage growth.

What Are OYO Unlisted Shares?

OYO unlisted shares are equity stakes in Oravel Stays Limited (OYO) that are not yet traded on public stock exchanges like NSE or BSE. These shares are typically bought and sold privately through brokers or platforms specializing in unlisted equities. Buying these shares offers early access to OYO’s potential growth before its shares become publicly tradable.

Pros of Investing in OYO Unlisted Shares

➢ Early Access to a High-Growth Unicorn

Investing in OYO unlisted shares allows you to get in before the company goes public. This early entry can offer substantial upside potential if the IPO performs well, as shares are often priced lower in the private market compared to the public listing price.

➢ Brand Recognition and Market Presence

OYO is a globally recognized hospitality brand operating in over 35 countries with global Gross Booking Value (GBV) standing at ₹10,700 crores in FY24. Its extensive network and innovative asset-light business model provide a competitive advantage and growth runway, which can translate into long-term value appreciation for shareholders.

➢ Strong Institutional Backing:

OYO is backed by major global investors such as SoftBank, Sequoia Capital, and Lightspeed Venture Partners. This institutional support not only validates OYO’s business model but also provides financial resilience and credibility.

➢ Rapid Revenue Growth & Improving Profitability:

OYO reported revenue growth from ₹4,780 crores in FY22 to ₹5,700 crores in FY23, and achieved its first positive EBITDA quarter in FY23. The company targets an EBITDA of nearly ₹800 crores in FY24, indicating a turnaround towards profitability—a key factor for IPO success and valuation.

➢ Technology-Driven Operations:

OYO’s proprietary technology platform streamlines bookings, property management, and customer experience. This tech-first approach enhances scalability, operational efficiency, and cost control, setting it apart from traditional hotel chains.

➢ Asset-Light Franchise Model:

By partnering with property owners rather than owning hotels, OYO scales quickly without heavy capital expenditure. This model allows for faster expansion and flexibility in adapting to market changes.

Cons of Investing in OYO Unlisted Shares

➢ Low Liquidity and Difficulty in Exiting

Unlisted shares are not traded on stock exchanges, making it challenging to find buyers. This illiquidity means you might have to hold the shares for an extended period or sell at a discount, which can limit your ability to realize gains or cut losses quickly.

➢ Price Volatility and Lack of Transparency

The pricing of OYO unlisted shares can be highly volatile due to limited trading volumes and less publicly available financial information. This opacity makes it difficult to accurately value shares and assess fair market price.

➢ Regulatory and Compliance Risks

Unlisted shares operate under lighter regulatory oversight compared to listed equities. Changes in government policies, delays in IPO approvals, or compliance issues can adversely affect share value and investor confidence.

➢ Operational and Market Risks Specific to OYO

The hospitality sector is highly competitive and sensitive to economic cycles, travel trends, and regulatory changes. OYO’s asset-light model depends heavily on franchise partners and technology, which may face execution risks or market disruptions.

➢ Potential Dilution and Corporate Governance Concerns

Pre-IPO investors may face dilution risks if the company issues more shares during fundraising rounds. Additionally, unlisted companies sometimes have less stringent corporate governance standards, which could impact minority shareholders’ rights.

Investing in OYO unlisted shares offers an exciting opportunity to participate in the growth of a global hospitality giant before its public debut. The potential for high returns is balanced by risks related to liquidity, valuation uncertainty, and sector-specific challenges. Investors with a long-term horizon and a high-risk tolerance may find this investment attractive, but it is crucial to conduct thorough due diligence and work with trusted intermediaries.