OYO parent PRISM is planning to nearly halve the size of the fresh issue in its proposed initial public offering (IPO) to up to Rs 3,350 crore from almost Rs 6,650 crore, sources said on Tuesday.
People familiar with the matter told PTI the reduction in the issue size follows continued strong cash generation and an improving balance-sheet position, which has lowered the amount of capital the company needs to raise compared with what was originally envisaged.
"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.
"The objective is to raise what the business needs while keeping the capital structure efficient. The plan is to repay the residual debt over the next two to three years through cash flows generated by the business," a person familiar with the matter said.
Earlier, OYO had planned to raise up to Rs 6,650 crore through an IPO, of which around Rs 5,000 crore was intended for debt repayment.
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The revised issue size comes with PRISM continuing to focus on reducing its outstanding debt.
Under the revised structure, most of the issue proceeds are proposed to be used towards repayment or prepayment, in part or full, of certain borrowings.
The revised issue comes as PRISM moves towards the next stage of its proposed IPO following its earlier filing of the UDRHP (Updated Draft Herring Prospectus).
Moody's Ratings has revised the outlook on PRISM to 'positive' from 'stable', while reaffirming the travel tech unicorn's B2 corporate family rating.
Explaining the rationale behind ratings, Moody's said, "We expect OYO's EBITDA (earnings before interest, taxes, depreciation and amortisation) to grow to around Rs 3,000 crore (USD 315 million) over the next 12-18 months as the company continues to scale and add new storefronts to its platform.
For FY26, OYO's EBITDA more than doubled to Rs 2,630 crore from Rs 1,080 crore in FY25.
OYO was founded in 2013 by Ritesh Agarwal, who currently holds a 30.52 per cent stake in the company. SVF India Holdings (Cayman) Ltd, a subsidiary of SoftBank Group Corp is the largest shareholder in the company, with a 40.04 per cent stake.