Oyo's IPO Strategy: How Prism Plans to Deploy ₹6,650 Crore Amid Debt Repayment Focus
Debt Reduction Dominates IPO Proceeds Plan
Oyo's parent company, Prism, is strategically planning the use of its proposed Rs 6,650 crore Initial Public Offering (IPO). According to the updated draft red herring prospectus (UDRHP) filed with the Securities and Exchange Board of India (SEBI), nearly three-fourths of the IPO proceeds are earmarked for debt repayment.The company has allocated Rs 4,987.5 crore, representing approximately 75 percent of the total issue size, specifically towards the prepayment or repayment of existing borrowings. This aggressive move indicates a commitment to strengthening its financial structure ahead of its public market debut.
IPO Structure and Future Capital Deployment
The upcoming IPO is structured as a fresh issue of shares, meaning there is no component designated for offer for sale (OFS) by current investors. However, Prism reserves the option to execute a pre-IPO placement of up to Rs 1,330 crore, which would potentially reduce the quantum of the main fresh issue if finalized.The remaining funds from the IPO are allocated for general corporate purposes. This focused plan suggests that while the market is expected to value the company at around $7-$8 billion (as previously reported by Moneycontrol), a primary goal remains deleveraging and balance sheet fortification.
Financial Turnaround Signals Stronger Debut
The UDRHP filing provides insight into Prism's significant financial improvement in recent periods. For the first nine months of FY26, Prism recorded a profit after tax of Rs 748 crore. This performance was achieved on an operating revenue base of Rs 6,941 crore, marking an 11 percent increase compared to the preceding year.The company’s profitability metrics show substantial growth. EBITDA more than doubled, rising from Rs 953 crore in FY25 to a projected Rs 2,127 crore. Further detail shows that EBITDA, excluding exceptional items, share-based payment expenses and other income, stood robustly at Rs 1,968 crore.
SEBI Approval Paves Way for Stock Market Listing
Prism had received the Securities and Exchange Board of India's (SEBI) approval earlier this month for the proposed IPO. This followed the confidential filing of its draft papers in December 2025. The debt reduction plan outlined in the updated prospectus reflects the company's commitment to improved financial health as it moves toward its anticipated stock market listing.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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