Mohandas Pai slams OYO over 'fake accounting', hospitality major replies

Former Infosys Director T.V. Mohandas Pai slammed Ritesh Agarwal-run Oyo for allegedly misleading investors via 'fake accounting' as the hospitality major reported its maiden positive EBITDA during the first quarter of the current fiscal.

Softbank-backed Oyo claimed (adjusted) EBITDA-level profitability of Rs 10.6 crore for the June quarter.

In a tweet, Pai who is currently Chairman of Manipal Global Education (Manipal University), said: "This is fake accounting! There is nothing like an adjusted ebitda. They are trying to mislead investors by such fake accounting. Regulators and stock exchanges should stop such misreporting in india."

The allegations came after Oyo filed an addendum to its earlier submitted draft red herring prospectus (DRHP), filed in October 2021 for its IPO, to the Securities and Exchange Board of India (SEBI).

The company is now eyeing early 2023 for its IPO amid volatile global market conditions.

Abhishek Gupta, Oyo's Group Chief Financial Officer (CFO), replied to Pai, saying that the EBITDA is "clearly reported".

"EBITDA is clearly reported & is higher Rs 10.57 cr for Q1FY23 than Adj EBITDA of Rs 7.26 cr. Other Income not included in EBITDA & Adj EBITDA. All numbers are from audited signed financial statements. Global non-GAAP metrics are defined transparently," Gupta tweeted.

The company said the revenue for FY22 was Rs 4,905 crore, a growth of 18 per cent from Rs 4,157.3 crore reported in FY21.

Oyo managed to halve its losses for FY22 at Rs 1,892.2, from Rs 3,382.5 crore in FY21.

Monthly gross bookings value per hotel, saw a 47 per cent growth in Q1 FY23 to Rs 3.25 lakh vs Rs 2.21 lakh for fiscal 22, as travel recovered after the pandemic.