FHRAI has sought SEBI’s intervention to suspend OYO’s IPO and reject its DRHP. The submission to the market regulator highlights irregularities like being engaged in anti-competitive business practices; inadequate disclosures of critical court cases; no disclosure on scenarios that may result in the holding company losing control of management of key subsidiaries, or entirely making the current business strategy unviable, should the rulings go against them; and, valuations that appear impossibly stretched when corroborated with other numbers disclosed in the DRHP, among others.
“It is also pertinent to note that Oravel in the Risk Factors section in the DRHP, has failed to adequately disclose the consequences of an unfavourable verdict. They have disclosed the consequences of a possible penalty imposed by the CCI, but haven’t disclosed that the CCI also has the power to direct behavioural changes to be undertaken by Oravel, which may completely upset the anti-competitive business practices engaged by them. Without this advantage, their revenues will be seriously impacted,” reveals Mr Gurbaxish Singh Kohli, Vice President, FHRAI.
