OYO’s parent company Prism is getting ready to go public with a much smaller asking price than before. According to a filing made on Thursday, the SoftBank-backed hospitality company now plans to raise up to Rs 3,350 crore through a fresh issue of shares, nearly half of the Rs 6,650 crore it had proposed in its updated draft prospectus filed with SEBI in June.
The cut is significant, and the company’s reasoning is refreshingly simple: it does not need as much money anymore. People familiar with the matter told PTI and The Economic Times that stronger cash generation and an improving balance sheet have brought the funding requirement down, allowing Prism to trim the primary capital it raises while keeping the capital structure efficient.
Why Prism needs less money now
Under the original plan, Prism wanted to raise up to Rs 6,650 crore, of which around Rs 5,000 crore was earmarked for debt repayment. One person familiar with the plan told PTI that the original issue was sized before the company’s more recent financial performance came through, and the goal now is to raise only what the business needs while keeping the capital structure efficient.
Most of the proceeds from the smaller issue are still proposed to be used towards repayment or prepayment, in part or full, of certain borrowings. According to the June draft prospectus, Rs 4,987.5 crore of the net proceeds was to be routed to Oravel Stays Singapore Pte. Ltd. for repaying borrowings and related interest, so the use-of-funds section will likely be reworked under the revised structure.
A long and winding road to the stock market
Prism’s listing journey has been one of the longest-running sagas in Indian startup history. The company first filed its IPO papers in 2021, seeking a valuation of up to $12 billion, but repeatedly delayed the offering, turning to debt financing as an alternative to a public share sale.
Importantly, the IPO will be a pure fresh issue. There is no offer for sale, which means existing investors, including SoftBank, founder Ritesh Agarwal, Microsoft and Airbnb, are not slated to sell their shares in the offering. Every rupee raised goes into the company.
Moody’s gives a thumbs up
The smaller issue size comes at a time when the company’s credit profile is on the upswing. Moody’s Ratings revised the outlook on Prism to positive from stable while reaffirming its B2 corporate family rating.
The rating agency expects Prism to sustain stronger earnings and free cash flow generation over the next 12 to 18 months, supporting further debt reduction. It projects Prism’s EBITDA to grow to approximately Rs 3,000 crore over that period, backed by continued expansion of its global hospitality network. The agency noted profitability has improved, with EBITDA more than doubling to Rs 2,630 crore in FY26 from Rs 1,080 crore in FY25.
What the IPO window looks like
Prism is eyeing a November launch for its IPO, subject to market conditions, industry sources told Fortune India. It will be entering a crowded primary market. The Jio Platforms IPO, India’s biggest-ever issue at Rs 30,213 crore, opened this week and is drawing heavy attention, and several other large listings are lined up for the coming months.
The company counts around 293,554 storefronts across more than 35 countries, spanning brands like OYO, Motel 6 and vacation-home businesses. Whether a smaller, more disciplined issue finally gets Prism over the finish line after five years of attempts will be one of the most-watched stories of this IPO season.
Key takeaways
- Prism, the parent of OYO, has cut its IPO fresh issue to up to Rs 3,350 crore from Rs 6,650 crore proposed in June.
- The cut follows stronger cash generation and an improving balance sheet, lowering the capital the company needs to raise.
- Most proceeds will still go towards repaying or prepaying borrowings; residual debt will be cleared from cash flows over 2 to 3 years.
- The issue is a pure fresh issue with no offer for sale, so existing investors are not selling.
- Moody’s revised Prism’s outlook to positive from stable and expects EBITDA to reach Rs 3,000 crore over the next 12 to 18 months.
FAQs
How much is Prism planning to raise in its IPO?
Prism now plans to raise up to Rs 3,350 crore through a fresh issue of shares, nearly half of the Rs 6,650 crore proposed in its June draft prospectus.
Why did Prism reduce its IPO size?
The company says stronger cash generation and an improving balance sheet have reduced the amount of capital it needs to raise.
Will existing investors sell shares in the IPO?
No. The issue is entirely a fresh issue with no offer for sale, so backers like SoftBank and Ritesh Agarwal are not selling.
What will the IPO money be used for?
Most of the proceeds are proposed to be used for repaying or prepaying borrowings, with residual debt to be cleared from business cash flows over two to three years.
When is the Prism IPO expected?
Industry sources say the company is targeting a November launch, subject to market conditions.
Prism’s second attempt at a public listing looks leaner and more disciplined this time. If the November timeline holds, the market will get to judge whether the turnaround story is worth the wait.
