OYO’s Rs 168.88 crore penalty came with a table. The table shows OYO’s revenue going from Rs 426.77 crore to Rs 5,575.27 crore in two years. Thirteen times, in twenty four months, on our arithmetic. A competition regulator’s penalty order is a strange place to find a growth story.
The OYO business model promised standardised stays in hotels OYO did not own. That gap is the whole story. To deliver a standard, OYO needed control over rooms it had no title to. It bought that control through contracts, fees and shelf space. In 2019 its hotel partners revolted over deductions. In 2022 India’s competition regulator fined it Rs 168.88 crore, though not for the reason most people think. In 2026 the model finally makes money, because OYO started running the hotels itself.
THE VERDICT: MIXED
The idea was right and the mechanism was wrong. OYO promised a standard it could only enforce through other people’s contracts. It is now profitable, and it got there by running the hotels itself.
Share of OYO’s India gross booking value coming from CheckIn, its company-serviced hotels, in the nine months to December 2025. In FY24 the figure was 2.61%.
Source: PRISM (formerly Oravel Stays) updated draft prospectus, 29 June 2026, as reported by INDmoney.
What did OYO actually promise?
A predictable room. That was it.
An Indian budget hotel in 2013 was a lottery. Two rooms at the same price could be wildly different. One had clean sheets and hot water. The other had neither.
OYO put a brand on the door and promised the room behind it would be the same everywhere. Fixed check-in. Working wifi. Sheets you would actually sleep on.
Hotel owners kept their building. OYO brought the demand and the standard.
It is a genuinely good idea. It was also a promise about property OYO did not own.
Why could OYO not enforce its own standard?
Because a standard needs control, and OYO had contracts instead.
A hotel chain that owns its hotels enforces a standard by instruction. It hires the staff. It buys the sheets. OYO owned almost none of the buildings it branded. So the standard had to travel through the agreement: audits, fees, penalties and minimum guarantees.
That is where it broke.
By August 2019, hotel owners were protesting in Nashik, Pune, Kota, Manali, Jaipur, Ahmedabad and Delhi. Inc42 reported what they said: charges levied without notice, including promotional fees, convenience fees, walk-in fees and audit fees. Owners described guest-complaint penalties worth three times the room rent, revealed only at month end. Their core complaint was that the deductions were not written into their contracts.
OYO’s answer at the time was that partners are told about charges in advance and at regular intervals, and it pointed to its 3C programme for penalties and rewards.
Those were allegations, reported as they were made. No court has tested them in a single judgment.
How fast OYO scaled the model it could not control
Relevant turnover as recorded by the CCI, Rs crore
These are the figures the Commission used to calculate the penalty, combining Oravel Stays Limited and OYO Hotels and Homes Private Limited. Source: Competition Commission of India, order in Case Nos. 14 of 2019 and 01 of 2020, 19 October 2022, paragraph 320. The 13x figure is The Brand Crush’s arithmetic on the FY18 and FY20 rows.
What did the CCI actually fine OYO for?
Not hidden commissions. This is the part most retellings get wrong, and it matters.
On 19 October 2022 the Competition Commission of India penalised OYO Rs 168.88 crore. The case did begin with a complaint from the Federation of Hotel and Restaurant Associations of India, the hotel owners’ body.
But the finding against OYO was about its commercial arrangement with MakeMyTrip and Goibibo. That arrangement led to rival budget chains FabHotels and Treebo being delisted from those booking platforms. The CCI’s order calls it anticompetitive under Section 3(4)(d) read with Section 3(1) of the Competition Act.
The penalty was 5% of OYO’s average relevant turnover across FY18, FY19 and FY20. OYO argued that only its booking commissions should count. The Commission said no, and used the whole business revenue instead.
So the regulator did not punish OYO for what it charged its hotels. It punished the shelf space it bought.
THE TELL
The penalty that stuck was never about what OYO charged its hotels. It was about the shelf space OYO bought to make sure guests found its rooms first. Control over supply was the point, and when the contracts could not deliver it, distribution was the next place to look.
One thing must be said plainly. OYO appealed. On 22 November 2022 the NCLAT admitted that appeal and stayed the penalty, on condition OYO deposited 10% of it. The appeal is still pending. Nothing here is a final ruling.
Is the OYO business model working now?
On the numbers, yes.
SEBI issued its observations letter, the regulatory green light, on 5 June 2026. PRISM, the renamed parent that used to be Oravel Stays, then filed an updated draft prospectus dated 29 June 2026.
Revenue for the nine months to December 2025 was Rs 6,941 crore. All of FY25 was Rs 6,253 crore. Nine months beat twelve. Reported net profit was Rs 748 crore against Rs 245 crore.
The IPO is Rs 6,650 crore, all fresh shares. About Rs 4,987.5 crore of it, roughly three quarters, repays subsidiary debt.
The change underneath those numbers matters more than the numbers.
OYO stopped renting the standard and started running it
CheckIn company-serviced hotels, share of India gross booking value
9M FY26 covers the nine months to 31 December 2025. Source: PRISM updated draft prospectus, 29 June 2026, as reported by INDmoney.
CheckIn is OYO’s company-serviced hotel business. It made 2.61% of OYO’s India gross booking value in FY24. In the nine months to December 2025 it made 49.29%.
Nearly half of OYO’s India bookings now come from hotels it services itself.
The standard finally works because OYO stopped trying to enforce it on somebody else’s hotel.
What is the best case for OYO?
THE BEST CASE FOR OYO
OYO solved a real problem that nobody else would touch. India’s budget hotels were genuinely unpredictable, and tens of thousands of small owners got a booking engine, a brand and demand they could never have built alone. When the model stopped working, the company did the hard, unglamorous thing: it shrank, cut costs, sold and restructured, and refiled its IPO at a fraction of the valuation it once carried rather than pretending the peak was real. Most companies marked down that far never come back. The nine months to December 2025 brought in more revenue than the whole of the year before it. And the current fix is the honest one, because paying to operate hotels costs far more than writing rules into somebody else’s contract.
So what is the verdict on the OYO business model?
Mixed, and both halves are real.
The OYO business model was right about the problem. Indian budget hotels were unpredictable and somebody had to fix that. Tens of thousands of small owners got demand and a booking system they could never have built alone.
The mechanism was wrong for the promise. A standard is hard to rent. Enforcing one through fees on an owner who keeps the building creates a fight, and OYO spent years in that fight. Its own June 2026 prospectus still lists 174 pending proceedings worth about Rs 4,435 crore, and 129 of them sit with subsidiaries.
The fix is expensive and honest. OYO is buying the control it once tried to contract for. The OYO business model in 2026 makes fewer promises about other people’s rooms. It runs more of its own.
The promise vs the record
What OYO promised
- One brand, one predictable room
- Standards applied across every property
- Owners keep running their own hotel
- OYO simply brings the demand
What the record shows
- Standards were enforced through fees, audits and penalties on partners
- Owners protested in seven cities in August 2019 over undisclosed deductions
- CCI penalised the OYO and MakeMyTrip arrangement Rs 168.88 crore in October 2022
- By the nine months to Dec 2025, OYO serviced hotels behind 49.29% of India bookings
What can you use from this?
Before you promise a standard, price the enforcement. If your brand promise depends on people you do not employ, that promise is a negotiation, and whoever owns the asset sets the terms. Work out what enforcement costs before the campaign goes out, not after your partners start counting the deductions.
A brand on the door does not mean the brand owns what is behind it. When a company promises a consistent experience across places it does not own, the consistency lives or dies on a contract you will never see.
The same trap shows up outside hotels. We wrote about D2C brands that depend on marketplaces they do not control, and about Nykaa’s five year round trip from listing day. The pattern repeats: a promise built on somebody else’s asset gets priced by whoever owns the asset. India’s quick commerce players are running the same experiment with delivery partners right now.
FAQ
What is the OYO business model?
The OYO business model is a franchise and platform business. It brands and lists independent budget hotels, brings them bookings, and charges fees on the revenue. Historically it did not own most of the hotels. Since FY24 it has shifted heavily toward company-serviced properties, which made 49.29% of its India gross booking value in the nine months to December 2025.
Why was OYO fined Rs 168.88 crore?
The Competition Commission of India fined OYO on 19 October 2022. The case was about its commercial arrangement with MakeMyTrip and Goibibo. That deal led to rivals FabHotels and Treebo being delisted from those platforms. The CCI found it anticompetitive under Section 3(4)(d) read with Section 3(1). The penalty was 5% of OYO’s average relevant turnover for FY18 to FY20.
Did OYO pay the CCI penalty?
No. OYO appealed to the NCLAT, which admitted the appeal on 22 November 2022 and stayed the penalty, subject to OYO depositing 10% of the amount. That appeal is still pending, so the penalty is not final.
Did hotel owners sue OYO over hidden commissions?
Hotel owners protested in several Indian cities in 2019. They alleged undisclosed deductions, and some filed police complaints. Their federation, FHRAI, took a competition complaint to the CCI. But the case that produced OYO’s penalty was about the MakeMyTrip deal. It was not about the commissions charged to hotels.
Is OYO profitable in 2026?
OYO reported a net profit of Rs 748 crore for the nine months to December 2025, against Rs 245 crore for the whole of FY25. Revenue over those nine months was Rs 6,941 crore, higher than the Rs 6,253 crore it made in all of FY25.
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This piece is analysis and opinion based on public filings and reporting cited above. Every figure is attributed to a named, dated source. OYO’s franchising and hotel business is lawful. Nothing here says that OYO or any person broke a law. The CCI penalty is stayed and under appeal at the NCLAT. The claims made by hotel owners in 2019 were reported allegations, and no court has ruled on them. This is not investment advice.
Sources: Penalty amount, revenue table, findings under Section 3(4)(d) and the FabHotels and Treebo delisting: Competition Commission of India, order in Case Nos. 14 of 2019 and 01 of 2020, 19 October 2022. Summary of the order and CCI directions: Khaitan & Co. Stay of the penalty and the 10% deposit condition: Inc42, 22 November 2022. Hotel owner allegations, the 2019 protests and OYO’s response: Inc42, 23 August 2019. FY25 revenue and the parent’s rename to PRISM: Entrackr, 5 September 2025. Nine month FY26 financials, IPO size, debt repayment allocation and the CheckIn share of India gross booking value: INDmoney analysis of the updated DRHP. Pending proceedings count and subsidiary litigation: Legal Wires on the UDRHP-I dated 29 June 2026. SoftBank’s markdown and the IPO valuation history: TechCrunch, 22 September 2022.
