Oyo Parent Prism Gets SEBI Nod for Rs 6,650 Crore IPO

Key Takeaways

• Prism received SEBI approval after filing its confidential DRHP in December 2025
• The IPO targets a valuation of $7-8 billion through Rs 6,650 crore fresh issue
• Moody's projects Prism's EBITDA to more than double to $280 million in FY26

Prism, the parent company of budget hotel chain OYO, has cleared a major regulatory hurdle. The Securities and Exchange Board of India has approved the company's initial public offering, paving the way for one of the most anticipated tech listings in recent years.

The company filed its Confidential Draft Red Herring Prospectus with SEBI at the end of December 2025. Shareholders had already approved raising up to Rs 6,650 crore through a fresh issue of equity shares at an Extraordinary General Meeting held on December 20, 2025.

What Happens Next

With SEBI approval in hand, Prism will now file a public Updated Draft Red Herring Prospectus. This document will be open for public comments for 21 days. Sources indicate the company plans to file by early July.

Prism is currently evaluating market conditions and broader listing timelines as it prepares for the next phase. The company has assembled a heavyweight team of investment banks to manage the offering. Axis Capital, Citibank, Goldman Sachs, ICICI Securities, SBI Caps, JM Financials, InCred Capital, and Intensive Fiscal Services are serving as book-running lead managers.

Board and Ratings Update

In a move that signals regulatory preparedness, Prism recently appointed former SEBI chairman Ajay Tyagi as an independent director on its board. Having a former market regulator on the board adds credibility as the company navigates the listing process.

On the financial health front, Moody's recently reaffirmed Prism's B2 corporate family rating with a stable outlook. The ratings agency expects the company's EBITDA to more than double to approximately $280 million (around Rs 2,496 crore) in financial year 2026.

This projected growth is supported by three factors: earnings from the G6 Hospitality acquisition, expansion of premium storefronts, and continued cost optimization efforts.

The Long Road to Public Markets

Prism, formerly known as Oravel Stays, has been working toward a public listing for several years. The company navigated multiple market cycles and refined its financial strategy before reaching this point. Strategic international acquisitions like G6 Hospitality have strengthened its position.

The company used SEBI's confidential pre-filing route, which allows companies to address regulatory concerns before making their documents public. This approach reduces the risk of negative publicity from a rejected or heavily revised filing.

Market Sentiment

Retail investor sentiment appears mixed. Discussions on finance-focused forums reflect skepticism alongside cautious optimism. Many investors are focused on the company's path to profitability compared to its earlier phase of aggressive expansion at all costs.

The Moody's rating and projected EBITDA growth may help address some of these concerns. Still, the company will need to demonstrate sustained profitability to win over skeptical investors who have seen other startup IPOs underperform.

Frequently Asked Questions

When will Oyo's parent company Prism file its public DRHP?

Prism plans to file its Updated Draft Red Herring Prospectus by early July 2025, according to sources familiar with the matter.

How much is Prism looking to raise in its IPO?

Prism is looking to raise Rs 6,650 crore through a fresh issue of equity shares, with an expected valuation of $7-8 billion.

Which banks are managing Prism's IPO?

Axis Capital, Citibank, Goldman Sachs, ICICI Securities, SBI Caps, JM Financials, InCred Capital, and Intensive Fiscal Services are the book-running lead managers.

What is Prism's projected EBITDA for FY26?

Moody's expects Prism's EBITDA to more than double to approximately $280 million (Rs 2,496 crore) in FY26.

Source: Tech-Economic Times / ET