OYO Parent PRISM Reportedly Plans to Halve Fresh IPO Size to ₹3,350 Crore

PRISM, the parent company of travel tech platform OYO, is planning to nearly halve the size of the fresh issue in its proposed initial public offering (IPO) to up to ₹3,350 crore from the previously planned ₹6,650 crore, according to sources familiar with the matter.

People close to the development told PTI that the reduction in the issue size comes on the back of continued strong cash generation and an improving balance-sheet position. This operational progress has lowered the amount of primary capital the company needs to raise compared to its original plans.

“The original issue was sized before the company's more recent financial performance came through. With cash generation remaining strong and the balance sheet improving, the funding requirement has come down, allowing the company to reduce the amount of primary capital it raises,” a person familiar with the matter said.

Sources indicated that the objective is to raise capital according to actual business needs while maintaining an efficient capital structure. The company plans to repay its residual debt over the next two to three years utilizing cash flows generated by the business operations.

Despite the reduced issue size, reducing outstanding debt remains a primary focus for PRISM. Under the revised structure, the majority of the issue proceeds are still proposed to be utilized toward the repayment or prepayment, in part or full, of certain borrowings. Earlier, OYO had intended to allocate around ₹5,000 crore out of the original ₹6,650 crore for debt repayment.

The revision comes as PRISM advances toward the next stage of its proposed public offering following its earlier filing of the Updated Draft Red Herring Prospectus (UDRHP).

In a related development ahead of the offering, Moody's Ratings has revised its outlook on PRISM to 'positive' from 'stable', while reaffirming the company's B2 corporate family rating. Outlining the rationale behind the rating action, Moody's stated that it expects OYO's EBITDA to grow to around ₹3,000 crore over the next 12 to 18 months as the business continues to scale and add new storefronts to its platform. For the fiscal year 2026, OYO's EBITDA more than doubled to ₹2,630 crore, up from ₹1,080 crore in the previous fiscal year.

OYO was founded in 2013 by Ritesh Agarwal, who currently maintains a 30.52 percent stake in the firm. SVF India Holdings (Cayman) Ltd, a subsidiary of SoftBank Group Corp, is the largest shareholder in the company with a 40.04 percent stake.

"A company reducing its IPO fresh issue size due to improved internal cash generation is a positive signal of operational health and financial discipline. Lowering reliance on public markets for primary capital indicates that the underlying business model is generating sufficient liquidity to support debt reduction organically. For investors, this demonstrates management's focus on capital efficiency rather than aggressive, capital-heavy expansion. However, the success of the offering will still hinge on maintaining sustained EBITDA growth and executing the planned debt clearance over the next few years." — Dr. Shishir Gupta, Founder & CEO, StartupLanes