OYO IPO: Moody's Moves Parent Prism Outlook to Positive
Moody's Ratings has revised the outlook on OYO's parent, Prism, to positive from stable, while reaffirming the B2 corporate family rating. The report was published on October 18, 2026, and comes as OYO prepares an initial public offering.
The rating affirmation reflects OYO's leading position in the budget accommodation sector across its key operating markets, as well as the geographic diversification of its operations across India, Europe, and the US.
Moody's said it expects OYO's EBITDA to grow to around ₹3,000 crore ($315 million) over the next 12-18 months as the company continues to scale and add new storefronts to its platform. For FY26, EBITDA more than doubled to ₹2,630 crore from ₹1,080 crore in FY25. Higher earnings and stabilising working capital outflows also enabled OYO to generate positive free cash flow in FY26 for the first time after several years of cash burn, and Moody's expects OYO to sustain positive free cash flow over the next one to two years.
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On the offering, OYO plans to raise around ₹6,650 crore through an initial public offering, of which around ₹5,000 crore would be used to repay debt. Moody's said that, if completed as planned, the offering would accelerate deleveraging and strengthen the company's credit profile. However, given uncertainty around the timing and execution of the IPO, its base-case financial forecasts do not incorporate the proceeds or the related debt repayment.
OYO, formerly Oravel Stays, was founded in 2013 by Ritesh Agarwal, who currently holds a 30.52 per cent stake in the company. SVF India Holdings (Cayman) Limited, a subsidiary of SoftBank Group Corp, is the largest shareholder, with a 40.04 per cent stake.
Sweta Patodia, a Moody's Ratings Assistant Vice President, said: "The positive outlook reflects our expectation that OYO (formerly Oravel Stays) will sustain stronger earnings and free cash flow generation over the next 12-18 months, supporting further deleveraging while maintaining very good liquidity."
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