The OYO Spin-off That Bought 38 American Hotels in One Year

Reviewed by BuyUnlistedShares Research Desk.

In March 2025, a company then called OYO Financial and Technology Services Private Limited had almost nothing to its name — no hotels, no real revenue, and total assets of just ₹2.5 crore, almost entirely owned by Oravel Stays, OYO's parent. Twelve months later, renamed Sunday Proptech Limited, it held hotels across the US, Dubai, the UK, and India through 49 subsidiaries, with ₹7,117 crore in assets and ₹3,203 crore of debt – while OYO's own stake fell to about 31%. Here's a quick, factual look at how that happened.

The Company, Before and After

The Business Model, in Brief

The company acts as both landlord and operator — buying under-performing, well-located hotels and running them itself, rather than owning or operating alone. It licenses established brands (Motel 6, Studio 6, and others) instead of building its own, for a modest ₹2.4 crore a year.

● Owned: ~₹4,590 crore of property, mostly in the US.

● Leased: long-term leases, mainly in Dubai and the UK — lower upfront capital.

● Managed: runs properties owned by others, with no capital outlay.

Where the Assets Sit vs. Where the Revenue Comes From

The US holds ~74% of assets but only ~17% of revenue, since the American hotels were bought late in the year and are still being renovated. Dubai's leased portfolio needs no acquisition capital and earns rent immediately, making it the largest revenue contributor despite a smaller asset base.

The 38-Hotel Purchase, and an Accounting Twist

The group bought 38 US hotels for ₹3,178 crore (~USD 343.5 million) during the year — 8 in November 2025, the rest before year-end — now being converted to the extended-stay format under established brands. Auditors valued this property at ₹4,504 crore, well above the purchase price, creating a ₹1,047 crore "gain on bargain purchase" after tax adjustments.

● Non-cash: a valuation entry, not money received.

● Large: equal to ~78% of the company's ₹1,350 crore net worth.

● Provisional: the valuation isn't finalised yet.

So far, the 38 hotels have added ₹44 crore of revenue and a ₹28.6 crore pre-tax loss – bought, but not yet turned around.

A Rapidly Changing Ownership Table

A private placement (₹239 crore) and a bonus issue reshaped the cap table from OYO's near-total 99.99% ownership:

OYO wasn't bought out — it was diluted, and also lost operational control under the new agreements, so the company is now booked as a joint venture rather than a subsidiary. Astera Ventures, the top shareholder, was renamed from Tattva Valuers around the same time; filings describe the company as having no identifiable promoter.

A Sharply Higher Debt Load

Reported finance cost (₹115 crore) understates the real run-rate — only ₹22 crore was interest on borrowings, since the largest loan (₹1,850 crore, from a US bank) was drawn just 11 days before year-end. A full year of interest could exceed ₹280 crore. Roughly two-thirds of debt is secured directly against the US hotels; several lenders also hold equity, and one lender loan converts into more shares over time.

The Related-Party Revenue Question

Of ₹269 crore total revenue, ~₹223 crore (83%) came from billing OYO group entities in Dubai, the UK, and India. The only outside revenue was ₹46 crore from direct US hotel sales. Transactions are disclosed as arm's-length with a clean audit opinion — but the revenue concentration within the same corporate family is significant.

A Few Loose Ends

● Dividend paid: a small interim + final dividend in year one, despite ₹3,203 crore of debt.

● No company website: noted directly in its own annual report.

● Lean board: 3 non-executive directors for 49 subsidiaries across 4 countries; CFO and company secretary joined just 2 months before year-end.

● Lease commitments: ₹2,171 crore in fixed, multi-year lease liabilities that don't fall with occupancy.

Frequently Asked Questions

1. What is Sunday Proptech and how is it connected to OYO?

Formerly OYO Financial and Technology Services Private Limited, it was almost entirely owned by Oravel Stays, OYO's parent. In one year it became a multi-country hotel platform, with OYO's stake diluted to about 31%.

2. How many hotels did the company acquire in the US, and for how much?

38 hotels for about ₹3,178 crore (~USD 343.5 million) — 8 in November 2025, and the rest before the financial year ended.

3. What is a 'gain on bargain purchase' and why does it matter here?

It's booked when acquired assets are valued above the price paid. Here, the US hotels were valued at ~₹1,047 crore above cost — a non-cash gain equal to ~78% of net worth, and still provisional.

4. Are the 38 US hotels profitable yet?

Not yet. They've added ₹44 crore of revenue but also a ₹28.6 crore pre-tax loss so far, reflecting a late-year purchase that's still being renovated.

5. Who owns Sunday Proptech now?

Astera Ventures (~35.7%), Oravel Stays/OYO (~31.1%), an individual shareholder (~6.1%), an investment services firm (~3.6%), and other shareholders (~23.5%).

6. Why did OYO lose control even though it didn't sell shares?

Its stake was diluted by new share issuances, and investment-agreement terms also removed its operational control — so it's now booked as a joint venture, not a subsidiary.

7. How much debt does the company carry?

Net debt of about ₹5,443 crore against ₹1,350 crore of equity — a debt-to-equity ratio of roughly 4.03x, up from 0.34x a year earlier.

8. Who are the main lenders behind this expansion?

A US bank holds roughly two-thirds of total borrowings, secured against the US hotels. The rest comes from mezzanine lenders, debentures, and related-party loans, some at 12–15% interest.

9. Why does most of the company's revenue come from OYO group entities?

About 83% of ₹269 crore total revenue came from billing OYO group entities in Dubai, the UK, and India. Only ₹46 crore came from outside the group.

10. Is this blog a recommendation to invest in this company?

No. This summarises public financial disclosures for informational purposes only. It is not investment, financial, or legal advice. Readers should do their own research or consult a registered advisor.

Disclaimer:

This is written for educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell securities. All data is sourced from publicly available information. Investments in securities markets are subject to market risks — please read all offer documents carefully before investing.