PRISM — the company formerly known as OYO — has filed for an IPO again, but the ₹6,650 crore it wants to raise is mostly to fix a balance sheet, the profit headline obscures a pre-tax loss, a critical hotel count was wrong in the draft, and a decade-old rival is still in court with a claim to 7% of the company.
Picture Ritesh Agarwal in 2021, standing behind an ₹8,430 crore IPO plan and a $12 billion valuation dream. Then picture SEBI returning the papers a year later, asking for rewrites. Then picture a smaller confidential refiling in 2023 getting pulled when a major debt refinancing made the financials obsolete. And now, five years and one corporate rebrand later, picture him filing again — with a new name, a genuinely improved balance sheet, and a claim of profitability that, on close inspection, needs some careful unpacking.
OYO is back. Except it isn't called OYO anymore — at least not at the parent level. The company Ritesh Agarwal built from a rented room in Gurugram into India's largest budget hotel aggregator has rebranded its corporate identity to PRISM (technically, PRISM Hotels and Resorts, formerly Oravel Stays Limited), a name meant to reflect an expanding global hospitality and co-working business. OYO survives as the consumer-facing brand for the budget segment, but the parent entity is now selling a much bigger story to the public markets.
On 30 June 2026, PRISM filed its updated draft red herring prospectus (UDRHP — the detailed public disclosure document SEBI requires before any IPO can proceed) with the regulator, after first getting SEBI's approval on 2 June. This is the final regulatory stage before a price band is set and shares go on sale.
This is a story about what kind of company PRISM has become, what exactly it is asking the public to fund, and why three specific details — a debt-heavy fund-use, an accounting-driven profit, and a long-running rival's equity claim — deserve your full attention before any subscription opens.
The IPO timeline alone says something important about this company.
OYO filed its first DRHP in October 2021, targeting ₹8,430 crore at roughly $12 billion. SEBI returned those papers in early 2022, asking for substantial updates. A second, smaller confidential filing followed in March 2023 — but was withdrawn in May 2024 when OYO embarked on a major debt refinancing that would have materially altered its financial statements, requiring a full refile anyway. The current 2026 attempt, filed confidentially in December 2025, is the one that finally cleared SEBI.
The valuation has adjusted accordingly. The target is $7–8 billion (₹59,000–67,000 crore), down from the $12 billion peak in 2021 but well above the roughly $2.5 billion discussed around the withdrawn 2023 attempt. That reset is, at one level, healthy: it reflects a more sober reading of where the company actually stands. At another level, $7–8 billion is still an enormous number to defend for a company that ran a pre-tax loss as recently as FY25.
One other thing that's different this time: in May 2026, former SEBI Chairman Ajay Tyagi joined PRISM's board as an independent director. That appointment, arriving just before SEBI clearance, sends a credibility signal to institutional investors who have been sceptical of OYO's governance history. It isn't proof of anything, but it isn't coincidental either.
The proposed public issue is entirely a fresh issue of equity shares — no offer for sale (OFS). That last part is notable. Existing shareholders, including SoftBank, Microsoft, Airbnb, Peak XV Partners, and Lightspeed, will not sell any shares through the IPO.
This sounds investor-friendly. No early backers rushing for the exit. But look more closely at where the money actually goes.
Of the ₹6,650 crore raised, ₹4,987.5 crore — almost 75% — has been earmarked for repaying or prepaying existing borrowings. The remaining funds will be used for general corporate purposes.
Read that again. Three-quarters of the money you invest will go towards paying off the company's lenders, not funding expansion. As of 31 December 2025, PRISM had total borrowings of ₹7,485 crore. Even after deploying the full IPO proceeds to debt repayment, a significant residual debt balance will remain.
How did PRISM accumulate ₹7,485 crore in debt? A large chunk is from its 2024 acquisition of G6 Hospitality — the company that runs Motel 6 and Studio 6 across the United States — from Blackstone Real Estate for $525 million (roughly ₹4,400 crore). That was a big swing that transformed PRISM's geographic footprint but also loaded its balance sheet.
The debt story has been improving. Net leverage — the ratio of net debt to EBITDA, a measure of how many years of operating profit it would take to clear the debt — has already narrowed from 12.28 times in FY23 to 2.60 times. S&P Global Ratings recently revised PRISM's credit outlook to positive from stable, citing improving profitability and stronger cash generation. Its credit rating remains 'B', though — sub-investment grade, meaning lenders still consider some default risk, and the IPO is essentially a refinancing event: public equity replacing expensive private debt.
Here is where it gets interesting for anyone who has learned to read financial filings carefully.
For the nine months ended December 2025, revenue from operations reached ₹6,941 crore, against ₹6,259 crore for all of FY25. Profit after tax (PAT) came in at ₹748 crore, against ₹245 crore for the full prior year. Nine months outpacing a full year on revenue, profit nearly tripling — it reads as a genuine breakout.
But there is an accounting term buried in those numbers that changes the picture: deferred tax credit.
Here's what that means in plain English. When a company has been losing money for years, it accumulates what accountants call tax losses — future tax deductions it can use once it turns profitable. Indian accounting standards (Ind AS 12) allow a company to recognise these future tax savings as an asset on its books right now, as long as it is "reasonably certain" of future profits. When you do that, you record it as income today — no cash changes hands, no customer paid you, but your reported profit goes up.
PRISM received a deferred tax credit of ₹559.3 crore during the nine months ended December 2025. In FY25 — the full financial year — the impact was even larger: the company recognised a deferred tax credit of ₹767.5 crore. Strip that out along with exceptional items, and PRISM ran a pre-tax loss of ₹489.3 crore in FY25. The headline ₹245 crore net profit was, in accounting terms, entirely a product of recognising future tax benefits — not operating cash generation.
This does not make PRISM uninvestable. Deferred tax recognition is legitimate and often signals that management genuinely believes in future profitability — because if those profits don't arrive, the asset has to be written back down, hurting future earnings. But it does mean the profitability story is not as clean as the headline PAT suggests. Investors who read only the headline number are not seeing the full picture.
The FY26 nine-month numbers look more operationally solid — EBITDA (earnings before interest, taxes, depreciation and amortisation — a proxy for core operating profit) reached ₹2,127 crore, more than double the ₹953 crore for all of FY25. That is a more encouraging signal. But the deferred tax component remains meaningful even in the 9M FY26 PAT figure.
The numbers in context:
Ritesh Agarwal has said the company was expected to close FY26 with a full-year profit of ₹1,100 crore. If the 9M number is ₹748 crore, Q4 would need to contribute around ₹350 crore. That's achievable — but it is a management projection, not an audited result.
One thing that is genuinely striking about this filing is how much the business has changed since 2021.
Today, nearly 84% of PRISM's operating revenue comes from international markets. The United States contributed 27% of revenue during the first nine months of FY26; Europe accounted for another 24%. India — the market that made OYO famous — now accounts for roughly 16% of revenue.
The US business exists largely because of the G6 acquisition. G6 is a franchise business — it earns royalties from independently-owned motels flying the Motel 6 flag — which means it carries structurally better margins than OYO's old commission-from-hotels model. In Europe, PRISM operates vacation rental brands including Belvilla, DanCenter, and CheckMyGuest. The company's European homes and listings portfolio expanded to 269,251 properties by December 2025 from 208,901 at the end of FY25.
As of 31 December 2025, PRISM's network included 243,303 hotels, 124,668 homes, and 144,583 listings across more than 35 countries under 43 hospitality brands.
Back in India, the strategic bet is on company-serviced hotels — a model where PRISM doesn't just list a hotel on its platform (aggregation: low margin, fragile relationships) but actively manages or leases the property (operational control, higher revenue per room, better margin). Storefronts in this segment rose to 1,573 by December 2025, from 1,053 in March 2025 — with brands including Sunday, Palette, Clubhouse, Townhouse and Townhouse Oak. During the first nine months of FY26, this company-serviced business generated a gross booking value (GBV — the total value of all bookings on the platform, before any costs) of ₹1,346 crore, against ₹818 crore for all of FY25.
The shift from pure aggregator to company-operated hospitality is essentially a margin chase. Whether that transformation is complete — or even halfway there — is the central question for anyone evaluating this IPO.
Every major OYO story since 2015 has had the same uninvited guest: Zostel.
The origin is almost Shakespearean. In November 2015, Oravel Stays executed a term sheet with Zostel Hospitality (owner of the Zo Rooms brand), Tiger Global and Orios Venture Partners, proposing an all-stock acquisition of Zo Rooms. Zostel's shareholders were to receive 7% of OYO's equity once the deal closed. The term sheet was explicitly labelled non-binding, and the companies never signed definitive transaction documents.
The deal collapsed. Zostel claimed it fulfilled its obligations — transferring its hotel business and staff to OYO — but said OYO reneged, primarily due to objections from a minority investor. OYO's position: the term sheet had lapsed after due diligence failed to converge, and was never binding.
What followed was a decade of litigation. In March 2021, an arbitral tribunal ruled in Zostel's favour — holding that the parties' conduct had made the term sheet binding and that Zostel was entitled to specific performance of the deal (i.e., it could demand OYO actually hand over the 7% stake). This award hung over OYO's previous IPO attempts; Zostel had even approached the Delhi High Court seeking to restrain OYO from altering its shareholding via an IPO.
Then in May 2025, the picture shifted. A single judge of the Delhi High Court set aside the entire arbitral award, ruling that the term sheet was non-binding on its face, there was no "meeting of minds" on essential deal terms, and enforcing such a document conflicted with the public policy of India.
Zostel went to the Supreme Court. The Supreme Court declined to entertain the petition on procedural grounds — the bench held that Zostel should have filed an appeal under Section 37 of the Arbitration and Conciliation Act (the statutory appeals provision) before the High Court, rather than approaching the Supreme Court directly via a special leave petition. Zostel withdrew and did exactly that: it filed a fresh appeal before a Division Bench of the Delhi High Court under Section 37.
The case is not over. That Division Bench appeal is pending, with the matter next listed for hearing on 8 July 2026. PRISM has flagged in its UDRHP that if Zostel ultimately obtains a final, non-appealable order in its favour, the company could be directed to issue or transfer up to 7% of its shareholding — or pay an equivalent monetary value.
At $7–8 billion, 7% of PRISM is roughly $490–560 million worth of equity. The courts have moved mostly in OYO's direction so far, but "mostly" and "legally final" are different things. This is a live risk that will sit in the IPO risk factors regardless of how the hearing goes.
The bull case for PRISM is real: genuine global scale, an improving operational trajectory, a US franchise business with structurally better margins, and a valuation meaningfully reset from the 2021 stratosphere. No OFS means none of the big early investors are using the IPO as an exit — that can be read as conviction. And the company now has 12 consecutive quarters of EBITDA profitability behind it, something it absolutely did not have in 2021.
But the bear case is equally real.
On valuation: At $7 billion against EBITDA of ₹1,083 crore in FY25, the EV/EBITDA multiple (enterprise value divided by operating profit — the standard yardstick for comparing companies regardless of capital structure) is approximately 53 times. Against an analyst projection of ₹2,496 crore in FY26 EBITDA, that forward multiple drops to approximately 23 times. That forward number only holds if the FY26 EBITDA trajectory is sustained — and it is an estimate, not an audited result.
On the India business: PRISM has been doubling down on profitability, but its India revenue of ₹1,255.6 crore in FY25 grew only about 4% from the prior year — modest growth in the company's home market, where brand recognition should theoretically be the strongest.
On the use of proceeds: The fact that 75% of fresh capital goes to retiring bank debt is not inherently bad — a cleaner balance sheet is genuinely valuable, and expensive debt is a drag on future earnings. But it does mean the company is not asking investors to fund a growth sprint. It is asking them to fund a balance-sheet repair, and then trust that growth follows on its own.
On pre-IPO market signals: Unlisted shares of PRISM have been trading in the ₹22–24 range in the grey market, down from ₹28–30 earlier in 2026. That's not a crashing signal, but it's not enthusiasm either.
OYO's original sin was scaling fast and breaking things — signing up hotels recklessly, treating franchisees poorly, and burning capital at a pace that made even its SoftBank backers nervous. The result was a valuation crash from $10 billion to the neighbourhood of $2–3 billion during its darkest 2022–23 period, mass layoffs, and two failed IPO attempts.
What has emerged from that chastening looks meaningfully different. The G6 acquisition, the European vacation rentals portfolio, the company-operated India hotels — these represent a genuine strategic shift away from a pure aggregation model that always had thin margins and fragile partner relationships. Since its founding in 2012, PRISM says it has served over 119 million unique customers, with nearly 68% of bookings coming directly through its own channels. Two-thirds of bookings direct means lower dependence on online travel agents like MakeMyTrip or Booking.com, and every booking that bypasses an OTA saves a 15–20% commission — a structural advantage that compounds over time.
The IPO, if it succeeds, will be a referendum on one question: do public market investors believe that the company which burned ₹1,287 crore in a single year (FY23) has genuinely become a disciplined, multi-brand hospitality operator? Or do they see a story that is better than its history, but not quite as good as its headlines?
The most interesting companies are often the ones whose story has genuinely changed but whose reputation hasn't caught up yet. The trick — and the risk — is being able to tell the difference.
OYO's IPO will be that test, live, on the BSE and NSE. Watch the price band. Read the deferred tax disclosures. And keep one eye on the Delhi High Court's 8 July diary.