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Saturday, November 23, 2024

JP Morgan extends INR 200 Crore credit facility to fuel Oyo’s expansion

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According to a report by ET, JP Morgan has extended a credit facility of INR 200 crore to Oyo. Sources familiar with the matter stated that the primary objective behind this credit line is to fuel the expansion of Oyo’s Accelerator Programme. Both Oyo and JP Morgan declined to comment on the matter.

The company launched its Accelerator Programme in March last year, with a target to support 50 first-generation hoteliers. Oyo articulated that its Accelerator Programme aimed to motivate and empower first-generation hoteliers to accelerate their hotel portfolio expansion, aligning with the surge in travel demand in both business and leisure cities.

Sources familiar with the matter revealed that Oyo’s Accelerator Programme presently aids more than 700 hotels and over 85 small and first-generation hoteliers nationwide.

Hotel owners with more than five running hotels are eligible to be part of the Accelerator Programme.

Continue Exploring: Oyo Hotels in advanced talks with Khazanah Nasional Berhad for $400 Million funding boost

Oyo had previously stated that through this initiative, it is aiding partners in attaining ‘sustained’ profitability and ‘enhanced’ earnings by providing mentorship, technological resources, dedicated relationship managers, financial assistance, and tapping into Oyo’s extensive network, which includes over 15,000 corporate accounts and more than 10,000 travel agents across India, thereby bolstering business opportunities.

Last month, Oyo’s founder Ritesh Agarwal informed employees that the company’s profit after tax (PAT) for the third quarter of the financial year 2024 has doubled sequentially to INR 30 crore.

The company achieved its first profitable quarter with a PAT of over INR 16 crore in the second quarter of this fiscal year.

Previously, sources reported that Agarwal stated in a town hall meeting that Oyo anticipates a continued rise in its net profit over the coming quarters. He attributed this growth to bolstered patron confidence, enhanced customer experience, and favorable market conditions conducive to sustained expansion.

Agarwal also revealed that Oyo recorded adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of INR 750 crore in calendar year 2023. He informed employees that the company is projected to achieve adjusted EBITDA of INR 1,000 crore in the current financial year, surpassing its previous estimate of INR 800 crore.

Previously, Oyo defined adjusted EBITDA as EBITDA adjusted for transformation expenses incurred on assets of its hotel partners.

Agarwal reported that Oyo experienced a 10% year-on-year growth in revenue during the third quarter. He mentioned that the number of hotels on its platform surged by 27% to 17,000 during the same quarter.

He informed employees that the company reduced its operating costs by 15% in the third quarter.

In November 2023, Oyo completed a debt buyback totaling INR 1620 crore. This buyback entailed repurchasing 30% of Oyo’s outstanding TLB, which was due in June 2026.

Oyo had previously stated that hoteliers participating in this program experienced a roughly 20% increase in revenue within three months.

Continue Exploring: IPO-bound OYO’s Q3 FY24 profit doubles QoQ to INR 30 Cr

SnackTeam
SnackTeamhttps://snackfax.com
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