Assn. targets OYO's IPO following CCI rap, hotel chain refutes charges
The SoftBank-backed hotel chain said the association was misrepresenting the competition watchdog’s order and that bookings had increased significantly for small hotels on its platform.
A hotel industry body has written to the capital market regulator seeking a stop on the public share offering of citing a recent order of the competition watchdog that had fined the hotel chain for anti-competitive behaviour.
The Federation of Hotel & Restaurant Associations of India had written to the Securities Exchange Board of India last year as well requesting a halt on OYO’s IPO process to protect the interests of small hoteliers.
“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 Tuesday. “We hereby request SEBI to stop/bar Oyo’s IPO efforts with immediate effect.”
A spokesperson for OYO refuted the charges, saying the platform had registered a “46% growth in gross booking value per hotel per month for over 10,000 small hotels, yet FHRAI office bearers keep alleging ‘destruction of small hotel segment’.”
Noting that hotel partner satisfaction scores for OYO had increased to over 72%, the spokesperson added that FHRAI was “completely misrepresenting the CCI order… (and) we hope that the regulator takes note of this wilful misrepresentation of its order.”
The Competition Commission of India in October fined and OYO for anti-competitive practices following allegations by FHRAI that the Nasdaq-listed hotel booking platform gave preferential treatment to the hotel chain. The authority fined MakeMyTrip and its subsidiary $27 million, and Oyo $20 million.
[Updated article to include OYO's reaction.]
Edited by Akanksha Sarma