OYO’s IPO became synonymous with highs and lows in India’s startup ecosystem. Every high point in the past four years saw OYO announce plans for an IPO, just to walk it back when things got rough. 

The company first filed its draft prospectus in 2021, hoping to become one of India’s largest new-age technology listings at a valuation north of $9 Bn amidst a wave of new-age firm listings including that of Eternal, Nykaa and Paytm. 

It withdrew the papers following SEBI’s queries and tech stock correction.

OYO tried again through the confidential filing route in 2023, only to withdraw its IPO papers in May 2024, citing weak market sentiment and an ongoing debt refinancing that would have materially altered its financials.

Today, OYO or PRISM is back but it is returning as a very different business. And this time around it doesn’t matter what the markets are like because unlike previously PRISM has profits on its side. 

The parent company, Oravel Stays Ltd, has filed an Updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI) for a fresh issue of ₹6,650 Cr, with no existing shareholders selling any stake in the offering. 

The company rebranded to PRISM in September 2025 to reflect a business that now spans 43 brands across 35-plus countries including hotels, vacation homes, extended-stay properties and listings rather than the single-brand, budget hotel aggregator that first tried to list in 2021. 

Roughly 84% of revenue now comes from outside India, led by the US (27% of 9MFY26 revenue) and Europe (24%), a mix substantially built through acquisitions.

The IPO is entirely a fresh issue, with existing investors including SoftBank, Airbnb, Microsoft, Lightspeed, Peak XV, Khazanah and founder Ritesh Agarwal choosing not to dilute their holdings.

That, by itself, tells an important story.

Unlike several recent startup IPOs where early investors used public markets as an exit route, PRISM’s listing is designed primarily to strengthen the balance sheet while allowing existing shareholders to continue participating in the company’s next phase of growth.

Yet public market investors are likely to judge the issue differently from private investors.

While private venture capital rewarded OYO’s ability to scale rapidly across markets, public market investors usually scrutinise companies around capital allocation, debt, cash flows and sustainability of profits.

The UDRHP suggests that PRISM has addressed several concerns that derailed its previous IPO attempts. 

It is now profitable, has diversified internationally.. Revenue from operations for the first nine months of FY26 already surpassed the company’s full FY25 revenue, while profit after tax jumped to ₹748 Cr.

However, the filing also reveals another reality.

Nearly 75% of the IPO proceeds will not finance expansion. They will be used to repay debt.

That also makes PRISM one of the most unusual startup IPOs India has seen. For investors, therefore, the central question isn’t whether PRISM has turned around.

It is whether that turnaround deserves a premium valuation that PRISM will price itself at. 

The Debt Conundrum

Every startup has a defining financial challenge. And for OYO, it has always been debt.

The roots of the problem trace back to the pandemic when global travel came to a standstill and hospitality companies witnessed one of the sharpest demand collapses in history. 

OYO responded by raising a sizable Term Loan B (TLB) facility of $660 Mn (nearly ₹4,892 Cr at the time) in 2021 to survive one of the worst crises the travel industry had faced.

That borrowing bought the company time.

Even as the demand from core Indian markets bounced back after Covid, OYO had already set its eyes on international expansion. To fund its international expansion plan OYO went for restructuring its loan via another refinancing facility.

By December 2024, OYO swapped that old loan for an even bigger one $830 Mn, or roughly ₹7,044 Cr arranged by Deutsche Bank.

A major part of this loan was paid for the $525-million acquisition of Motel 6 and Studio 6 owner G6 Hospitality, which is now the backbone of OYO’s US business. 

As of December 2025, ₹7,338 Cr worth of loan is still hanging its weight on the company books. 

The latest UDRHP shows that PRISM intends to deploy ₹4,987.5 Cr out of the IPO proceeds towards repayment or prepayment of borrowings, accounting for almost three-fourths of the fresh issue proceeds. 

The remaining amount will be used for general corporate purposes.

Perhaps the most closely watched aspect of this borrowing is founder Ritesh Agarwal’s holding company, RA Hospitality Holdings (Cayman) whose shares were pledged for a loan. 

The UDRHP identifies RA Hospitality Holdings as one of the company’s promoters holding 20.12% of the stake in PRISM alongside Agarwal and SoftBank’s SVF India Holdings.

IPO papers suggest that 100% of the RA Hospitality Holdings shares were pledged in September 2025 to avail another three-year term loan facility of $150Mn.

The IPO documents flag that any defaults in the repayments of this loan will invoke the change in ownership of RA Hospitality Holdings (Cayman) could trigger a subsequent change for PRISM.

Market participants are thus likely to closely watch how the IPO proceeds will reduce leverage. The debt repayment, therefore, is not merely a balance sheet exercise. It also becomes a test of financial discipline and governance. 

In the medium run, lower leverage could significantly reduce annual finance costs, improve free cash flows and strengthen return ratios, which institutional investors will closely track. 

Profitability Milestone Unlocked

If debt explains PRISM’s past, the company’s profitability explains why it believes now is the right time to return to public markets.

Unlike its previous IPO attempt, the business entering the market today looks fundamentally different. For the nine months ended December 31, 2025, PRISM reported revenue from operations of ₹6,941 Cr, already exceeding its entire FY25 revenue of ₹6,259 Cr.

Profit after tax stood at ₹748 Cr, compared to ₹245 Cr in FY25.

EBITDA increased to ₹2,127 Cr, while adjusted EBITDA excluding exceptional items, share-based compensation and other income reached ₹1,968 Cr, around 80% higher than FY25.

Those numbers suggest that profitability is no longer being driven merely by accounting adjustments. The underlying business itself is generating cash and profits.

Much of this turnaround has been driven by acquisitions that significantly altered PRISM’s geographic and revenue mix.

The biggest among them is G6 Hospitality, owner of the iconic Motel 6 and Studio 6 brands across the United States and Canada.

The acquisition immediately transformed North America into OYO’s largest operating geography.

According to the filing, the US business generated ₹12,022 Cr of Gross Booking Value during the first nine months of FY26, contributing more than half of the group’s global booking value.

Unlike the original India business which depended heavily on budget hotel aggregation, the G6 business contributes a more stable franchise-led revenue stream with royalty income.

The company has also expanded its European operations through brands such as Belvilla, DanCenter and CheckMyGuest, strengthening its presence in vacation rentals and managed homes.

Together, these acquisitions have changed the quality of PRISM’s revenues.

Instead of depending disproportionately on Indian budget hotels, PRISM now generates revenues across franchised motels, vacation homes, managed hotels, premium hotels and technology services spread across multiple geographies.

That diversification is likely to matter during valuation.

On the flipside, India markets for PRISM have seen a gradual decline in growth over the last few years with revenue infact seeing a 10-11% decline in 9M FY26 from FY25. 

Public markets generally reward companies that reduce dependence on a single geography or business line while improving earnings visibility. PRISM appears to be moving in precisely that direction.

Another positive indicator is customer quality.Nearly 68% of stays now originate through direct customer channels, reducing dependence on online travel aggregators and lowering customer acquisition costs. Repeat customers account for over 61% of stays.

These metrics indicate a business gradually shifting from rapid expansion towards improving unit economics.

For institutional investors, this transition could be far more valuable than the topline growth alone.

Rebranding Course

In public market discourse, companies are benchmarked against a peer group. Hence OYO’s turnaround from an Indian budget hotel aggregator chain to global hospitality firm could also trigger its comparisons with the other global hospitality majors

Company sources we earlier spoke to said that PRISM is structuring its business closer to publicly listed hospitality operators like Marriott and Accor, rather than a pure-play online travel aggregator. 

The bet is that the public market will evaluate PRISM on predictable revenue streams, long-term contracts, and scalable technology and not just occupancy or discount strategy.

Markets today are willing to reward profitable technology companies but only if valuations sufficiently reflect execution risks.

That could ultimately become the defining conversation around PRISM’s IPO.

[Edited By Nikhil Subramaniam]

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