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The Federation of Hotel and Restaurant Associations of India (FHRAI), on Tuesday, reportedly said that it has written to market regulator Securities and Exchange Board of India (SEBI) to stop OYO from launching its initial public offering (IPO). The move comes at a time when the Competition Commission of India (CCI) imposed a penalty on the hospitality and travel-tech firm for 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,” said FHRAI in a statement.
The association also said that it has requested Sebi to stop or bar OYO’s IPO efforts with immediate effect.
As per reports, in October, CCI slapped penalties of more than INR 392 crore on online travel firms MakeMyTrip, Goibibo, and hospitality services provider OYO for indulging in unfair business practices.
Commenting on the matter, as per reports, OYO said that FHRAI is misrepresenting the CCI order and the letter to Sebi 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.
“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,” said an OYO spokesperson, reported by ET.
In October 2021, according to reports, OYO filed preliminary papers with Sebi to raise INR 8,430 crore through an initial share sale. The company said that it has not launched an IPO, citing the volatile nature of the market.