38 Hotels in 12 Months: The OYO Spin-Off's Massive US Expansion

24 August 2026

A shell company under OYO's umbrella, OYO Financial and Technology Services, had barely anything on its books in March 2025: no hotels, no real revenue, just ₹2.5 crore in assets. A year later it had been renamed Sunday Proptech Limited and had grown into a company worth ₹7,117 crore in total assets, running hotels across the US, Dubai, the UK, and India, with 49 subsidiaries under it. OYO's ownership share dropped from nearly 100% to just 31% in that same window. This wasn't organic growth. It was a company built from scratch in twelve months through acquisitions, borrowing, and a major shareholder reshuffle.

How the business actually works

Most hotel companies pick a lane: either you own the real estate and collect rent, or you operate the hotel and take a management fee. Sunday Proptech is trying to do both at once, buying underperforming but well-located hotels, fixing them up, and running them directly so it captures both the property value and the operating profit.

It holds these hotels three different ways. Some are owned outright (mostly in the US, worth around ₹4,590 crore). Some are on long-term leases, which is a cheaper way to enter a market and is how it operates in Dubai and the UK. And some are managed on behalf of other owners, which needs no capital at all.

What's notable is what it chose not to build. It doesn't have its own hotel brand or booking technology. Instead it licenses brand names like Motel 6 and Studio 6 in the US from G6 Hospitality, and uses OYO's own brands (Sunday Hotels, Palette, Townhouse) in India and the Gulf. The entire cost of licensing all these brands for the year came to just ₹2.4 crore, a tiny fraction against a ₹7,117 crore asset base. The logic is that building brand recognition and tech from the ground up only pays off once you're operating at massive scale, so for now it's cheaper to rent that infrastructure.

Where the money is versus where the money comes from

The clearest way to see the strategy is to compare where the assets sit against where the revenue is actually coming from.

The US holds nearly three-quarters of all assets but only produced about a sixth of total revenue. That's because most of the American hotels were bought late in the financial year and are still being renovated, so they haven't started earning yet. Dubai shows the opposite pattern: a smaller asset base but the biggest revenue contribution, because it runs mostly on leases that generate rental income right away without tying up large amounts of capital. India, despite being where OYO started and where most people know the brand from, barely registers here with just ₹6 crore in revenue.

The 38 hotel purchase and an accounting quirk worth understanding

During the year, the company bought 38 hotel properties in the US for roughly ₹3,178 crore. Eight of them came from two sellers in November 2025, and the rest were picked up from various sellers before the year closed. All of these are being converted into the extended-stay format under the Motel 6 and Studio 6 brands.

Here's the part that needs a careful look. When a company buys a business, its auditors assess the fair value of everything acquired. In this case, the auditors valued the acquired property at ₹4,504 crore, well above the ₹3,178 crore actually paid. After subtracting a deferred tax liability of ₹278 crore, that leaves a gap of roughly ₹1,047 crore. Accounting rules call this a "bargain purchase gain," and management is framing it as proof they negotiated well and got more value than they paid for.

Three things are worth keeping in mind about that gain. First, it isn't cash. No money moved into the bank because of it; it's purely a valuation adjustment sitting in the capital reserve. Second, this single gain makes up about 78% of the company's entire net worth of ₹1,350 crore, meaning if you strip it out, the balance sheet looks a lot thinner. Third, the report itself notes that the purchase price allocation hasn't been finalized yet. These are provisional numbers based on management's own assessment, and while they don't expect big changes, nothing is locked in.

Also worth noting: those same 38 hotels only generated ₹44 crore in revenue since they were acquired, and actually posted a pre-tax loss of ₹28.6 crore. They've been bought, but they haven't been fixed yet.

Who's actually behind the company

A year ago ownership was simple: OYO's parent, Oravel Stays, held basically all of it. That changed after the company issued new shares through a private placement, raised about ₹239 crore, and added a large batch of bonus shares. The ownership table now looks very different.

OYO never sold any shares, it simply got diluted as new shares were issued to others. But the effect was significant: the terms of these new share agreements meant OYO lost operational control of the company. It's no longer treated as the parent company in accounting terms and is now booked as a joint venture partner instead.

Two details stand out here. The new largest shareholder, Astera Ventures, was renamed from something called Tattva Valuers Private Limited around the same time all this was happening. And the annual report explicitly states the company has no identifiable promoter and is professionally managed, meaning the ultimate owner behind that biggest shareholder isn't disclosed anywhere in the filing.

The debt picture

Borrowing exploded over the year. Total borrowings sit at ₹3,203 crore, and once you add lease obligations of ₹2,171 crore and other financial liabilities, then subtract the small amount of cash on hand, net debt comes to roughly ₹5,443 crore against equity of just ₹1,350 crore. That's a debt to equity ratio of about 4 times, up from just 0.34 times the year before.

The reported interest expense is a bit misleading too. Finance costs for the year came to ₹115 crore, but only ₹22 crore of that was actual interest on loans; most of it was interest tied to lease obligations. That's because the biggest loan facility, ₹1,850 crore from Citibank, was only drawn down eleven days before the financial year ended. On a full year basis, interest on the total borrowings at a typical rate of 9 to 10% would likely run north of ₹280 crore, meaning the real interest burden hasn't shown up in these numbers yet.

Most of the lending is secured directly against the American hotel portfolio, largely through Citibank, with a mix of other lenders including mezzanine financing, private placement notes, and some high interest loans from entities that are also shareholders in the company, like InCred and Astera Ventures. One of the lenders, RA Hospitality Holdings, is linked to OYO's founder.

The revenue dependency that stands out most

This is probably the most important thing to understand about the company right now. Total revenue from operations was ₹269 crore, and rental income alone made up ₹223 crore of that, or 83% of the total.

Looking at the related party disclosures, nearly all of that rental income traces back to other OYO group entities: OYO's Dubai hotel management arm, its UK operating company, its vacation rentals business, and a few smaller OYO-linked entities. Adding those up gets you almost exactly to the ₹223 crore rental income figure. The geographic pattern matches too: revenue from Dubai, the UK, and India lines up closely with payments from OYO group companies in those same markets.

In other words, essentially all of the rental income is coming from within the OYO ecosystem itself. The only revenue that comes from genuinely outside parties is the roughly ₹46 crore earned from the American hotels' actual guest bookings.

Management describes the relationship with OYO as a partnership rather than a dependency. That's fair when it comes to brand licensing, which only costs ₹2.4 crore. But when 83% of total revenue comes from the same corporate family, and all these related party deals are disclosed as being done at arm's length with a clean, unqualified audit report, the word "independent" is carrying a lot of weight.

A handful of other things worth flagging

The company paid out a dividend this year, ₹3 crore as an interim payment and another ₹1.5 crore proposed as a final payment, despite carrying over ₹3,200 crore in debt in its very first year of operating at this scale. Management calls this a signal of confidence; others might see it as cash that could have gone toward interest payments instead.

The company doesn't even have a website, a detail the annual report mentions directly when explaining why certain filings weren't uploaded online.

Governance is thin for a company this size. The board has only three non-executive directors, no managing director, and no whole-time director, despite overseeing 49 subsidiaries spread across four countries. Both the CFO and company secretary were only appointed in February 2026, just two months before the financial year closed.

And while the lease-heavy approach in Dubai and the UK is genuinely capital efficient since it doesn't require buying property outright, it isn't risk free either. Those ₹2,171 crore in lease obligations are fixed, multi-year commitments. Rent doesn't go down if a hotel's occupancy drops, and some of these lease contracts even come with financial covenants, essentially behaving the way a lender's loan conditions would.

The bottom line

What's been built here is a highly leveraged bet on turning around budget hotels in America, financed largely through foreign debt, run by a team with deep OYO ties, and currently kept afloat by rental income from OYO's own group companies. It's a coherent strategy, and the price paid for the hotel portfolio does appear to have been a good deal on paper.

But the numbers from this first year describe a company that's just getting started, not one that has proven its model works. The reported profit of ₹13.5 crore sits almost entirely on top of a ₹1,047 crore non-cash accounting gain that hasn't even been finalized yet. The real interest cost from all that new borrowing hasn't fully hit the books. The newly acquired American hotels are currently losing money. And operating cash flow of just ₹32 crore is a fairly thin cushion under net debt of ₹5,443 crore.

The year ahead is where this story will really get tested, once the full interest burden lands, once the Motel 6 conversions need to actually start filling rooms, and once it becomes clear whether revenue from outside the OYO family can grow faster than the debt taken on to build all this.