W Steve Albrecht, non-executive director on the board and head of audit committee, OyoAs the travel and hospitality sector rebounds post-Covid, global hospitality platform Oyo reported its maiden Ebitda positive quarter as per the latest financials filed with SEBI on September 19, attributing the narrowing of losses to the recovery in travel demand in the markets it operates. The Softbank-backed company reported Rs 7 crore ($1 million) adjusted Ebitda in Q1 FY2023.
In FY22, Oyo reported an increase of 18 percent in revenue to Rs 4,905 crore from Rs 4,157.3 crore in FY21. It also halved its losses at Rs 1,892.2 crore in FY22 from Rs 3,382.5 crore in FY21. In Q1 of FY23, losses stood at Rs 353.4 crore, according to reports.In addition to reporting its financials, the company also filed an addendum to the draft red herring prospectus (DRHP) submitted in October last year for its initial public offering (IPO). Sources said depending on the market conditions, it will look at early CY23 for its launch.The company’s non-executive director on the board and head of audit committee, W Steve Albrecht, on his first visit to India since taking charge in June 2020, sat down with Forbes India to discuss the latest update, the company’s finance, and corporate governance.Q. You’ve been on several audit committees, been the former president of the American Accounting Association and more. Why choose to guide Oyo?
Number one, it has a great management team. Second, with a huge total available market, there is lots of opportunity. And last, I took a hard look at the financials of the company, and became comfortable.
Q. Is Oyo IPO-ready?
We always want to be ready. That’s one of the reasons we’re having quarterly audits. We want the market to be right, so we’ll assess what is the best time for us to go public. But I’ve worked with many young companies that went public, and compared to those, I would say, Oyo is further along because we have more revenues, we are now Ebitda positive, we already have a public company mindset and we care about the right things. But, when a company goes public, everyone tends to focus only on the financials, but it’s much more than that. Often we’ve seen that companies go public, and then all of a sudden, they have a problem. Many a times, those will be related to the management, or governance. But with Oyo, we’re ready on various fronts such as management, revenues, profits, governance, and more.
Q. The conditions are still volatile with the state of the economy, the Russia-Ukraine war, and Covid-19 still prevalent in various parts of the world. Is it a good time to get into the IPO game?
One of the things I learnt a long time ago is that markets are based on future expectations, not on today’s economy. However, we will consider all the factors. But all I would say is that the world is waiting for things to come together, it won’t be too long, we know we want to be ready. A lot of things are beyond our control, but what is, is that we want to focus on being as profitable as possible and organic growth first.
Q. What do you think Oyo needs to work upon?
We need to recover from the Covid-19-induced stagnation. We want to add more storefronts. We want to continue work on having a great management team.
Q. It is a fragile time for startups. What should they do to maintain growth and positive results?
First, the board and the management needs to have a positive attitude and be optimistic about the future. Young companies need to have crisp goals, financial metrics, and a well-defined strategy that has a vision, and yet is realistic. Next would be to have processes in place to accomplish that strategy. They need to have the right kind of technology, and a clear communication plan. And last, a keen eye on the competition because somebody could come and take the momentum away in seconds.
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