OYO’s parent PRISM has taken a decisive step toward a long‑awaited market debut, calling an extraordinary general meeting (EGM) on December 20 to seek shareholder approval for raising up to ₹6,650 crore via a fresh equity issue as part of its IPO plan. Alongside, the company has unveiled a simplified 1:19 bonus issue—one fully paid‑up share for every 19 held—with December 5 as the record date, replacing an earlier controversial 6,000:1 proposal that drew sharp investor backlash for complexity and perceived bias toward select large shareholders.
New Bonus Issue and Capital Structure Changes
- Revised Bonus Ratio: 1:19, applicable to all equity shareholders; issued from share premium and reserves as of March 31, 2025. Conversion ratios for all CCPS series will be adjusted to maintain economic parity.
- Earlier 6,000:1 Plan Withdrawn: Investors criticised the old structure as opaque and operationally cumbersome, with risks that smaller shareholders missing communication could be disadvantaged. PRISM shelved it and promised a transparent, automatic alternative.
- Authorised Capital Hike: From ₹2,431 crore to ₹2,491 crore to accommodate the bonus issue and the proposed IPO, via amendment to the Memorandum of Association.
While specific IPO timing is not fixed, reports suggest PRISM aims to file an updated DRHP by late 2025 and list in early 2026 at a potential valuation of $5–7 billion, lower than its earlier $9–11 billion aspirations.
OYO’s Two Failed IPO Attempts: What Went Wrong Earlier
- First Attempt (2021–2022):
- Filed DRHP in September 2021 for an ₹8,430‑crore IPO, targeting an $11B valuation.
- SEBI returned the DRHP in January 2023, seeking clarifications on KPIs, outstanding litigation, and valuation metrics; market volatility and tech‑stock correction further dampened appetite.
- It withdrew the plan in 2022.
- Second Attempt (2023–2024):
- Re‑filed via SEBI’s confidential route in 2023 with a reduced issue size and lower valuation ($4–6B).
- Pulled back again in 2024, citing a need to refinance Term Loan B (~$660M) and strengthen earnings.
- Prepaid ₹1,620 crore (about 30%) of its TLB via buyback, cutting debt to ~$450M before regrouping for another IPO shot.
The third attempt now comes after two full profitable years, lower leverage, and a cleaner cap table—making the current push structurally stronger than earlier ones.
Latest Financials: From Heavy Losses to “Most Profitable Startup”
Company claims it has transformed into one of India’s most profitable unicorns:
- FY24 (maiden profitable year):
- FY25 (second profitable year):
- PAT: ₹623 crore, up 172% YoY, aided by a deferred tax gain of ₹765.6 crore; excluding this, OYO recorded a loss before tax of ₹489.3 crore.
- Adjusted EBITDA: ₹1,083–1,132 crore, growing 22–27% YoY, marking 10 consecutive EBITDA‑positive quarters.
- FY25 revenue from operations: ₹6,252.8 crore, up 16% from ₹5,388.8 crore in FY24, driven mainly by hotel and home bookings.
- Q4 FY25 revenue: ₹1,872 crore (+41% YoY); GBV of ₹6,379 crore (+126% YoY); Q4 adjusted EBITDA ₹442 crore (+61% YoY).
Founder Ritesh Agarwal has told employees that we are eyeing net profit of ~₹1,100 crore in FY26, which, if achieved, would further strengthen its IPO story.
Strategic Position and IPO Readiness
- Debt Refinancing: Prepayment of a chunk of Term Loan B reduced interest burden and improved OYO’s leverage ratios—key for SEBI and institutional investors.
- Business Mix: India now contributes ~20% of global revenue, with strong growth in leisure destinations and premium hotels; the company positions itself as a “global travel tech” platform rather than a pure budget‑accommodation play.
- Valuation Reset: From a $9B peak private valuation, OYO is now seen targeting $5–7B in the IPO, a more palatable range given public‑market expectations for profitability and cash generation.
What to Watch Next
- EGM Outcome (Dec 20): Approval for the ₹6,650‑crore raise and bonus issue will formally clear the decks for a DRHP filing.
- DRHP Details: Final mix of fresh issue vs OFS, use of proceeds (debt reduction vs growth capex), and updated risk disclosures (litigation, franchisee disputes, regulatory issues).
- Sustainability of Profitability: Investors will scrutinise how much of OYO’s profit stems from core operations versus one‑off items like deferred tax gains, and whether double‑digit EBITDA margins are durable across cycles.
If PRISM successfully executes this third IPO attempt with cleaner governance, a fairer bonus structure, and demonstrably sustainable profits, OYO could finally make the transition from a volatile startup story to a mature, publicly‑listed travel‑tech company on Dalal Street.
Read this: OYO’s Parent PRISM Announces Major Leadership Restructuring To Drive Global Expansion
