S&P Global revises IPO-bound Oyo parent Prism’s outlook to ‘Positive’

Prism, formerly Oravel Stays Ltd, recently received markets regulator Sebi’s approval for its initial public offering.

“The positive outlook reflects our expectation that Oravel’s credit metrics will improve significantly over the next 12 months if the company maintains its good earnings momentum and improves its capital structure through an IPO,” S & P Global Ratings said.

A successful IPO could also materially improve the company’s capital structure, which is currently weighed down by debt-like instruments, it added.

“Credit ratios could further strengthen if the company uses its IPO proceeds to pay down debt,” the rating agency said. ​

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According to S & P Global Ratings, Prism’s capital structure will strengthen with a successful IPO, as the company’s compulsory convertible preference shares (CCPS) and compulsorily convertible cumulative preference shares (CCCPS) will convert to equity in the event of the public offer.

“We currently treat these instruments as debt-like in our financial ratios because of their lack of permanence. The instruments will convert to equity in a successful IPO,” the rating agency said.It observed that Prism’s earnings could continue to improve over the next 12 months on an improving scale, better operating efficiencies and a healthy cash conversion rate.

“Oravel’s revenue could exceed Rs 92 billion or about USD 1 billion in fiscal 2026, from Rs 62.5 billion in fiscal 2025. This follows the company’s full integration of G6 Hospitality LLC, which the company acquired in the fiscal 2025,” S & P Global Ratings said.

According to the global rating agency, the company’s revenue could further increase by about 15 per cent in the fiscal 2027 on the group’s upscaling to premium offerings, new asset additions and healthy same-storefront growth rates.