Stop Oyo IPO, Hotels Body FHRAI Writes To SEBI
FHRAI has written to SEBI to stop Oyo from launching its IPO in the wake of a CCI penalty for unfair business practices.
Federation of Hotel and Restaurant Associations of India on Tuesday said it has written to SEBI to stop Oyo from launching its IPO in the wake of a penalty imposed by the Competition Commission of India on the hospitality and travel-tech firm for unfair business practices.
Oyo, however, said the FHRAI is misrepresenting the CCI order and the letter to Securities and Exchange Board of India is to distract attention from the executive committee meeting of FHRAI being held as null and void by the NCLT, which has also ordered a court-monitored AGM of the hospitality industry body.
In October this year, the CCI slapped penalties totalling more than Rs 392 crore on online travel firms MakeMyTrip, Goibibo, and hospitality services provider Oyo for indulging in unfair business practices.
"Now that Oyo has been found guilty of indulging in anti-competitive and unfair business practices thereby affecting the business of small hotels and suppressing competition, it is imperative that its IPO should not be allowed in the interest of the hospitality sector, consumers and potential investors," FHRAI said in a statement.
Further, the association said it has requested "SEBI to stop/bar Oyo's IPO efforts with immediate effect."
The hospitality industry body alleged that "OYO is responsible for the systemic depredation of the budget segment hotel business and its market as a means to achieve a notional billion-dollar valuation which is a serious cause of concern for the hospitality ecosystem of the country."
When contacted, a spokesperson of Oyo said, "'FHRAI is also completely misrepresenting the CCI order, by claiming (the aggregators were) "found to be indulging in predatory pricing, exorbitant and unfair commissions, misrepresentation of information and arbitrarily levied service fees." We hope that the regulator takes note of this wilful misrepresentation of its order."
"FHRAI is again resorting to making incorrect sensational statements' to distract attention from 'the fact that NCLT has held the executive committee meeting of FHRAI as null and void, has ordered fresh elections and has ordered a court-monitored AGM in the presence of a nominee of the court," the spokesperson said.
In October 2021, Oyo filed preliminary papers with SEBI to raise Rs 8,430 crore through an initial share sale. So far, it has not launched an IPO, citing the volatile nature of the market.
FHRAI said in 2019, it had filed a complaint against Oyo and Make My Trip-Goibibo with the CCI and alleged that Oyo's systemic depredation of the budget segment hotels caused serious distress to the hospitality sector of the country.