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Has IPO-bound OYO regained trust of its hotel partners?

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As travel tech major OYO prepares for its much-awaited public listing, the continued satisfaction of its hotel partners and winning back dissatisfied partners will play a key role in determining how its business performs and, by extension, how its stock holds up.

The company has recently been affected by some of its hotel partners publicly complaining, filing cases and even writing to the regulator.

The moot question here is: Has IPO-bound OYO regained the trust of its hotel partners which it also addresses as Patrons?

Let’s take a closer look at its patron policies through its draft red herring prospectus (DRHP) filed with SEBI.

With over 157,000 storefronts worldwide, the 40 reported cases against the company or its directors translate to less than 0.02 per cent of its storefronts. OYO sources say that majorly of these originate due to shifting from minimum guarantee to revenue sharing arrangement. As per DRHP, at its peak, 14.7 per cent hotels had minimum guarantee. This number is down to nearly zero now.

After bingeing on growth and expansion, the company seems to have refocused its priority to course correct on the hotel partner front.

Revenue growth is by far the biggest and most meaningful value proposition that OYO claims to provide its hotel partners worldwide. Its DRHP tries to prove it by showing the median revenue growth for a storefront after 12 weeks of a hotel joining the OYO platform.

The highest revenue uplift for storefronts is in the European Vacation Homes Business at 2.4 times, while India is still at a healthy 1.9 times increase in revenue.

The platform has several revenue enhancement tools, including machine-learning based dynamic pricing algorithms which use hundreds of parameters such as the supply and demand, seasonality and local trends to arrive at the optimal real-time price for a room and thus maximising partner revenues.

Another pricing tool is the Tariff Manager, which gives partners control over pricing based on their understanding of potential local demand. Currently, 45 per cent of OYO hotels use a tariff manager on a monthly basis globally.

It has introduced a prepaid e-wallet to simplify revenue collection and reconciliation process and moved from a monthly reconciliation process to now offering hotel partners daily payouts to improve their working capital flow.

It does consistent engagement with partners now via regular town halls. All of this has led to an increase in Patron satisfaction score from 30.1 per cent for the three months ended September 30, 2020, to a healthier 72.3 per cent for the three months ended March 31, 2021.

OYO now has over 2,700 hotel partners with more than one property signed up on its platforms. For India, this translates to 9.5 per cent of the hotel owners.

New hotels are joining the OYO platform via a self-onboarding tool, ‘OYO 360′, which automatically generates digital contracts based on property details and KYC documents provided by hotel partners.

In fiscal 2021, almost all the company’s contracts with new hotel Partners were signed and managed digitally, says the DRHP.

However, OYO still hasn’t been able to assuage all of its sceptics. Some traditional hoteliers still believe that the model of offering season wise pricing with minor discounts is the only way to keep the small hotels category viable.

Few others are still to come to terms with the abolition of the minimum guarantees which gave them certainty of revenues and are still in courts demanding compensation. There are signs of thawing though; according to company sources, close to 1,300 hotel partners facing issues in the past have joined back.

Given the buoyant IPO market, OYO’s public offering may sail through successfully, but the continued partner satisfaction will have a huge impact on its growth and hence its stock performance. A point OYO’s founder Ritesh Agarwal would do well to take note of.

Business

‘Innocent Unless And Until Proven Guilty’: Adani Group Issues Statement In The US Bribery Indictment; Denies Charges, Calls Them Baseless

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The Adani Group, which has been at the eye of the storm since the beginning of the new day, has issued a statement in the US Indictment matter.

Adani Denies Charges

The company, in a statement procured by the conglomerate-owned IANS, said, “The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied.”

Furthermore, the statement asserted its stance and added, “As stated by the US Department of Justice itself, “the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.” All possible legal recourse will be sought.”

Committed to Highest Standards

The Adani Group further added that it has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.

US Court Indicts Adani and Co.

The company, in an attempt to assuage stakeholders, partners and employees, said that the company is a law-abiding organisation, fully compliant with all laws.

The storm was kicked off by a post from short-seller group Hindenburg, which shared the news of the US Federal Court’s indictment of Gautam Adani and seven others associated with the company.

Billionaire Gautam Adani has been charged by US prosecutors for allegedly being part of a scheme to pay over USD 250 million (about Rs 2,100 crore) bribe to Indian officials in exchange of favourable terms for solar power contracts.

The press release from the US court elaborated on the allegations and claimed that the company and its leadership had indulged in mass bribery activity, in which the company bribed Indian officials to bag a contract for its Adani Green Energy company.

This in turn led to misleading American investors and global financial investors.

The court reportedly also issued an arrest warrant against Gautam Adani and seven others.

Adani Shares Tank

In the aftermath of the report, Adani Group company shares tanked at Dalal Street. With Adani Enterprises shares hitting the lower circuit, losing 20 per cent of their value. The situation was the same with the other Adani stocks, including Adani Green Energy, which is in the middle of the new storm.

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Business

Bharat NCAP Awards 5-Star Crash Test Rating to Mahindra Thar Roxx

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The Mahindra Thar Roxx has earned a prestigious 5-star rating in Bharat NCAP’s latest crash tests, reflecting its commitment to safety. Recently evaluated under stringent testing, the SUV excelled with a 31.09 out of 32 score for adult occupant protection and 45 out of 49 for child safety.

Tested in its AX5L and MX3 variants, the Mahindra Thar Roxx delivered notable results, scoring 15.09 out of 16 in the Frontal Offset test and a perfect 16 out of 16 in the Side Impact test. The assessment revealed strong protection for most areas, with adequate ratings for the driver’s chest and lower legs.

The Mahindra Thar Roxx has received high marks for child occupant safety, scoring 24 points in Bharat NCAP tests, along with 12 points for CRS (Child Restraint System) installation and a Vehicle Assessment Score of 9. This top-tier safety rating applies to all Thar Roxx units produced from November 2024 onward, underscoring Mahindra’s dedication to enhancing safety features across its SUV range. Additionally, Mahindra’s XUV400 and 3XO models have also achieved 5-star safety ratings, further emphasizing the automaker’s commitment to robust safety standards.

The Mahindra Thar Roxx offers two interior themes – Classic Ivory and a new Dark Mocha Brown. Comfort and convenience are prioritizing with ventilated seats, leatherette upholstery, a digital driver display, a larger 10.25-inch touchscreen, a high-quality Harmon Kardon sound system, a panoramic sunroof, rear AC vents, wireless connectivity for Apple CarPlay and Android Auto, and a six-way adjustable driver’s seat, combining practicality with luxury.

Mahindra Thar 5-door comes packed with safety and interior upgrades to enhance its appeal. On the safety side, it includes essentials like six airbags, three-point seatbelts for all occupants, hill control features, electronic stability control, and a seatbelt reminder. Advanced driver-assist features, such as autonomous emergency braking, adaptive cruise control, lane-keeping support, lane departure alerts, and a 360-degree camera system with blind spot monitoring, add an extra layer of protection.

Mahindra Thar Roxx offers two engine choices: a 2.0-litre turbo-petrol and a 2.2-litre diesel. The petrol engine comes in two setups—150 bhp and 330 Nm of torque for the manual, and 174 bhp with 380 Nm for the automatic. The diesel option is available only with four-wheel drive.

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Business

Why The Indian Stock Market Struggled: Inflation, FPI Outflows, And Currency Pressure; Everything You Need To Know

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The Indian stock market on Wednesday (November 13) wrapped the another challenging day, marking the fifth consecutive session of losses.

The Sensex and Nifty, the two benchmark indices, both ended lower amid concerns over inflation and a broad selloff in metal stocks.

Market Snapshot

By the close of the trading session, Sensex was down by 984.23 points, or 1.25 per cent, ending at 77,690.95. Nifty 50 followed suit, shedding 324.40 points, or 1.36 per cent, to settle at 23,559.05.

The day saw a sea of red on both the Sensex and Nifty, with the majority of stocks ending lower. Among the few gainers were NTPC, Tata Motors, and Infosys, which saw minor upticks on BSE.

However, the broader market was dominated by heavy losses, especially in stocks such as JSW Steel, State Bank of India (SBI), Adani Ports, Mahindra & Mahindra (M&M), and Tata Steel, all of which posted declines.

Reasons behind the sharp decline

One of the major factor contributing to the market’s downward trajectory is the growing concern related to inflation.

As per the data which released by the Ministry of statistics and Programme Implementation regarding the India’ retail inflation, it showed that for the month of October, it surged to 6.21 per cent, breaching the Reserve Bank of India’s (RBI) upper tolerance limit of 6 per cent for the first time in over a year. The primary factors that contributed to surge include rise food prices, driven by the extended monsoon season and crop damage.

Adding to the pressure is the continued outflow of foreign portfolio investments (FPIs). On November 12, FPIs sold shares worth Rs 364.35 crore, bringing the total outflows for November to Rs 23,911 crore

The Indian rupee also struggled on November 13, weakening by 1 paisa to close at 84.38 against the US dollar.

The rise of the US dollar, which surged 1.8 per cent in November, has been exacerbated by the US presidential election result and higher bond yields. The US 10-year bond yield spiked to 4.42 per cent, further diverting capital away from emerging markets like India.

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