Corporate Finance

Running head: CORPORATE FINANCE
Corporate Finance
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1CORPORATE FINANCE
Table of Contents
Introduction:...............................................................................................................................2
OYO Rooms Business Models:.................................................................................................2
Capital structure of OYO Rooms:..............................................................................................4
Major competitors of OYO:.......................................................................................................5
Capital Structure of OYO Competitors:.....................................................................................6
Lemon Tree Hotels Ltd:.........................................................................................................6
Fab Hotels:.............................................................................................................................6
Treebo capital structure:.........................................................................................................7
Vista Rooms:..........................................................................................................................8
Acquisition:................................................................................................................................8
Recent Operating and Financial Performance:..........................................................................9
Sustainable Business Demand Channel:..................................................................................12
Conclusion:..............................................................................................................................12
References:...............................................................................................................................13

2CORPORATE FINANCE
Introduction:
OYO Rooms, is generally known as the OYO which is regarded as India’s largest
hospitality company that comprises of largely the budget hospitals. The company was
founded during the year 2013 by Ritesh Agarwal and ever since its establishment the business
has grown over 8,500 hotels in 230 cities of India, UAE, China, Nepal and Indonesia.
Following three months of the research and staying in more than 100 bed the owner
established a pivoted Oravel to OYO in the year 2013 (Gupta, 2018). OYO builds partnership
with the hotels to provide similar guest experience all through the cities. Shortly following
the launch of the Oravel Stays, Ritesh Agarwal received a grant of $100,000 as the part of the
Thiel Fellowship from the Peter Thiel.
OYO Rooms Business Models:
OYO Rooms asserts to be one of the branded network of budget hotels and hence
claims to be different from the other hotel aggregators and OTAs (Online Travel Agents)
namely Goibibo, Make my trip, Clear Trip and Yatra. The business model of OYO Rooms is
such that it simply connects the hotel aggregators with the guests by listing the hotels on their
website and taking up the commission as their revenue (Owler 2018). Several times the hotel
aggregators work on the deal with the hotel aggregators for a minimum order guarantee per
month and as a result they are able to offer discounted rates and deals on the rooms in
comparison to the rates that is given by the hotel to the normal guest. The business model of
OYO Rooms is such that it makes it lucrative for the guests. The business model of OYO
Rooms is that it neither owns any hotels nor it is the hotel aggregator.
OYO Rooms builds partnership with the non-standardized hotels and blocks rooms by
purchasing them for a specific period of duration. OYO later resells the room under its brands
to potential guests (Owler 2018). The business model of OYO Rooms is such that it naturally

3CORPORATE FINANCE
adds up to the operational costs and demands huge amount of working capital to the first
block the rooms. This enables the owners to understand where their money is going.
The manner in which OYO Rooms functions is different from the Online Travel
Agents (OTA) as they emphasis on the co-branding. According to reports OYO forms
partnership with the two to three star hotels and also includes the standardized guest house
and attracting customers though their website or applications. The initial marketing strategy
of OYO Rooms involved listing hotel of its properties.
During the late 2017, OYO Rooms launched an Airbnb such as marketplace for the
short term managed rentals. OYO Rooms has the presence in more than 10 leisure
destinations of India that also includes Goa, Shimla, Pondicherry, Udaipur, Kerala etc. In the
month of April 2018, Oyo launched the OYO Home in Dubai which is the first international
accommodation for the company.
Figure 1: Figure representing OYO Overview
(Source: Owler 2018)