# 75% Oyo parent IPO proceeds to pare debt | Company Business News **By:** Agnidev Bhattacharya,Varuni Khosla **Published:** 2026-07-01T06:00:36+05:30 **Source:** [mint](https://www.livemint.com/companies/75-oyo-parent-ipo-proceeds-to-pare-debt-hospitality-prism-oravel-ritesh-agarwal-11782826168713.html) --- News 75% Oyo parent IPO proceeds to pare debt Agnidev Bhattacharya, Varuni Khosla 6 min read1 Jul 2026, 06:00 AM IST The Oyo and Prism parent bought G6 Hospitality, the parent company of Motel 6 and Studio 6, in December 2024, adding some 1,500 franchised hotels in North America to the Indian travel platform’s portfolio. Summary No capital in the share sale is earmarked for funding capital expenditure at the company which is changing its brand name from Oyo to Prism.This is a Mint Premium article gifted to you. Subscribe to enjoy similar stories. Hospitality firm Oravel Stays Ltd, the parent company of Indian travel platform Oyo, plans to raise ₹6,650 crore in an initial public offering, three-fourths of which will be used to repay or prepay outstanding borrowings, according to updated draft papers filed late Monday with the country’s markets regulator. The IPO will not include an offer-for-sale (OFS) component, meaning existing investors—including SoftBank's SVF India Holdings, founder Ritesh Agarwal, RA Hospitality Holdings, Microsoft, Airbnb, Khazanah, Lightspeed, Greenoaks Capital, and Peak XV—will retain their holdings and not sell any shares as part of the IPO. No capital in the share sale is earmarked for funding capital expenditure at the company which is changing its brand name from Oyo to Prism. Oravel has to pay back ₹7,044 crore on a five-year debt facility from Deutsche Bank AG, which it raised in 2021. The company had accounted ₹1,089 crore as finance costs for the nine months ended December 2025. Also Read | Hotel chains double down on resorts as leisure travel booms The UDRHP, short for updated draft red herring prospectus or the IPO document, marks the third attempt by the Oyo and Prism parent to go public after failed attempts in 2021 and 2023. Like other prospectuses that detail risks for investors, the Oravel filing listed operational and regulatory risks for the travel company, that Mint reported could be valued at $7-8 billion. A request for comments in this story sent by Mint to Oravel representatives did not elicit a response at time of publishing. Promoter pledge Oravel's UDRHP shows that the entire share capital of a key promoter entity has been indirectly pledged to secure a three-year external financing facility, the terms of which might potentially trigger a change in corporate control in the event of a debt default. The filing shows that Oyo founder Agarwal indirectly holds 100% of Preferred Hospitality Holdings (Cayman), or PHH. PHH, in turn, has 100% ownership of RA Co, a classified promoter company that holds 3.19 billion shares in Oravel, representing a 20.12% stake on a fully diluted pre-issue basis. PHH entered into an external financing facility effective 30 October, 2025, with a tenure of three years. To secure this arrangement, PHH pledged 100% of the share capital of RA Co to DB International Trust (Singapore) Ltd, a subsidiary of Deutsche Bank AG. Bloomberg News had reported in November 2025 that Deutsche had refinanced around half of a $350 million (around ₹3,300 crore at today's rates) loan originally extended by Mizuho Bank Ltd to fund Agarwal's 2019 purchase of shares in Oravel. A source in the know, meanwhile, said the loan facility “continues to perform as intended”, adding the arrangement “has successfully navigated multiple market cycles, including the covid-19 pandemic and the global interest rate tightening cycle”. The package extends beyond PRISM and “includes interests in a broader portfolio of high-quality unicorns”. While Oravel has not disclosed the particular underlying facility documents, the events of default in promoter financing of this nature are fairly standard, explained Archana Balasubramanian, partner at Agama Law Associates. "The most sensitive is usually the financial covenant package: loan-to-value or security-cover ratios tied to the value of the pledged shares, where a fall in implied value can require a top-up or trigger acceleration without any payment default at all." To be sure, offshore promoter holding companies being pledged for personal financing is a route used by founders to secure personal capital without creating direct encumbrances on the underlying operating company's shares. Also Read | Cube Highways kicks off roadshows for ₹5k crore IPO, eyes October launch International drives growth While Oravel reported profits in the nine months ended December 2025 and the preceding two financial years, the filing pointed to one-off gains. In the first three quarters of FY26, the company’s profit was pulled down by interest costs to ₹744 crore but benefited from a bump-up of ₹559 crore in deferred tax credit; its revenues for the period were ₹6,941 crore. But the source quoted pointed out to benefits from debt reduction from IPO proceeds. “The company proposes to utilize ( ₹4,987 crore)… IPO proceeds towards repayment or prepayment of borrowings. Based on the current borrowing profile, this is expected to reduce the annualized cost of borrowings by approximately 25%, with that reduction flowing directly through to net profit.” Its FY25 profit of ₹247 crore was again largely based on a deferred tax credit, even as it reported a loss before tax. It reported profits of ₹220 crore in FY24, a year after it restated losses of ₹1,286.5 crore in FY23. The other change is how Oravel reports most of its revenue from overseas markets. More than 83% of its operating revenue in the first nine months of FY26 came from outside India, up from about 75% in FY23. India now contributes about a sixth of overall revenues. Revenues from overseas operations helps the company hedge against a rupee weakening against the US dollar and also signals tapping into premium market, an industry expert said. Navneet Nagpal, founder of Spectra Hospitality, said that India's declining revenue share isn't a moat problem, "It's the G6 and European acquisitions diluting the mix. It was always about scale and distribution. That's why it shifted towards premium hotels and overseas markets." The Oyo and Prism parent bought G6 Hospitality, the parent company of Motel 6 and Studio 6, in December 2024, adding some 1,500 franchised hotels in North America to the Indian travel platform’s portfolio. Still, Oravel remains dependent on its core hotel business. Accommodation services accounted for 55% of revenue in the first nine months of the year FY26, while booking commissions and royalty income contributed another 32%. Its asset-light model has also lifted profitability. Gross profit as a share of revenue rose from about 43% in FY23 to nearly 61% in the first nine months of FY26, even as it expanded to over 24,000 hotel and 120,000 home storefronts across more than 35 countries. Besides G6, Prism said integrating acquisitions such as France's CheckMyGuest and Australia's MadeComfy will be critical. The prospectus also flagged regulatory risks, including an ongoing Competition Commission of India probe. It also speaks about its dispute with hostel chain Zostel over a failed merger more than a decade ago. Also Read | DS Group boosts FY27 hotel investment by 50% to ₹1,500 cr amid hospitality boom Independent directors with ESOPs Lastly, the DRHP also highlights specific financial interests held by members of Prism's board. Independent directors Troy Alstead and William Albrecht hold 5.22 million and 5.14 million vested options under the company's employees stock ownership plan or ESOP. These options were granted on 21 April, 2020, and 14 May, 2020, respectively, during their tenures as nominee directors of corporate promoter, RA Co. Both individuals subsequently resigned from their nominee positions before joining as independent directors to the Prism board in September 2021. Such ownership can raise questions in investor minds, a second lawyer said. "If a director's financial interests are closely tied to the company, shareholders may legitimately question whether such a director is independent in practice, even if they satisfy the technical requirements of independence under the law," said Hardeep Sachdeva, a senior partner at law firm AZB & Partners. But the source in the know quoted earlier pointed out that even if Alstead’s and Albrecht’s options are exercised, “the resultant shareholding of each individual would remain well below the 2% threshold prescribed under the Companies Act for determining independence”. Alstead, who chairs the Harley-Davidson board of directors, and retired Stanford accounting professor Albrecht, hold no directorship in any other Indian company. About the Authors Agnidev is a business journalist with over two years of reporting experience tracking the intersection of capital, policy, and corporate strategy in India.

He joined Mint in December 2025, after a stint at NDTV Profit (erstwhile BQ Prime). At Mint, Agnidev focuses on the high-stakes world of the Indian capital market, specialising in mergers and acquisitions, burgeoning IPOs, and the investment banking industry.

Backed by a rigorous, data-driven approach, Agnidev frequently breaks news on the valuation cycles, deal pipelines and listing strategies of India’s most prominent companies. His reportage offers deep dives into the operational health of market leaders across the corporate landscape, providing readers with a clear-eyed view of institutional growth.

He has reported on major issues like India's derivatives frenzy, IPO froth, the competitive quick commerce industry, the real-money gaming ban, and has broken investigative stories related to scandals such as IndusInd Bank's accounting manipulation and the Gensol-BluSmart fiasco.

As a reporter, he brings stories that ultimately affect your stock market investments, and tries to bring clarity and brevity in a field that is often filled with jargon and noise. Varuni Khosla is a journalist with Mint, where she covers the consumer economy with a focus on hospitality and tourism, luxury, the business of sports, art, and the alcohol and food and beverage industries. Based in New Delhi, she reports on how brands and cultural sectors grow, shape consumer demand and compete in one of the world’s fastest-evolving markets.

Varuni has been a journalist since 2009 and brings more than 17 years of experience reporting on India’s business landscape. She specialises in covering the industries shaping India’s consumption economy, and is widely recognised as a key voice in these areas.

Over the years, she has closely tracked the rise of India’s luxury and hospitality sectors, the transformation of advertising and marketing as brands respond to digital platforms and changing audiences, and the economics of sport, from sponsorships and leagues to the expanding commercial ecosystems around teams, athletes and media rights. Her reporting on the business of art explores the growing global market for South Asian art and the role of collectors, galleries and auction houses.

Her stories frequently draw on exclusive conversations with founders, executives and industry leaders, combining market data with on-the-ground reporting to offer readers insight into the companies and trends shaping India’s evolving consumption economy. Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. More Topics #OYO #IPO #Acquisitions