New Delhi: Moody’s Ratings has upgraded the outlook on IPO-bound OYO parent Prism to ‘positive’ from ‘stable’, while reaffirming its B2 corporate family rating. The revision reflects expectations of stronger earnings, improved cash flow and lower debt over the next 12-18 months.
Strong Earnings Support Outlook
Moody’s expects OYO, formerly Oravel Stays, to maintain healthy earnings growth and generate positive free cash flow, helping strengthen its financial position.
Sweta Patodia, Assistant Vice President at Moody’s Ratings, said the positive outlook reflects expectations of stronger earnings and cash generation, supporting further debt reduction while maintaining very good liquidity.
The agency also highlighted OYO’s strong presence in budget accommodation and its diversified operations across India, Europe and the United States.
EBITDA May Reach ₹3,000 Crore
Moody’s expects OYO’s EBITDA to increase to approximately ₹3,000 crore over the next 12-18 months as the company expands its platform and adds more properties.
In FY26, OYO’s EBITDA more than doubled to ₹2,630 crore from ₹1,080 crore in FY25, reflecting improved business performance.
Higher earnings and stabilising working capital requirements also helped the company generate positive free cash flow in FY26 after several years of cash burn.
Moody’s expects this trend to continue over the next one to two years, with operating cash flow supporting planned capital expenditure.
₹6,650 Crore IPO In Focus
OYO is preparing to raise approximately ₹6,650 crore through its proposed initial public offering, with around ₹5,000 crore earmarked for debt repayment.
Moody’s said successful completion of the IPO could accelerate debt reduction and improve the company’s credit profile.
However, uncertainty surrounding the offering’s timing and execution means the agency has excluded potential IPO proceeds and debt repayments from its financial forecasts.
SoftBank Remains Largest Shareholder
Founded in 2013 by Ritesh Agarwal, OYO has expanded into several international accommodation markets.
Agarwal currently holds a 30.52 per cent stake, while SoftBank Group subsidiary SVF India Holdings (Cayman) Limited remains the largest shareholder with 40.04 per cent ownership.
