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

S&P Global Ratings has revised the outlook for Prism, the parent company of hospitality firm Oyo, to 'Positive' from 'Stable' and affirmed its 'B' issuer credit rating on the company's senior secured term loan. The revision comes as Prism, formerly Oravel Stays Ltd, has received approval from India's markets regulator Sebi for its initial public offering.

The rating agency stated that the positive outlook reflects its expectation of significant improvement in Prism's credit metrics over the next 12 months, contingent on sustained earnings momentum and a strengthened capital structure through the IPO. S&P noted that a successful IPO could materially improve the company's capital structure, which is currently burdened by debt-like instruments such as compulsory convertible preference shares (CCPS) and compulsorily convertible cumulative preference shares (CCCPS). These instruments are expected to convert to equity upon a successful public offering.

S&P Global Ratings further observed that Prism's earnings are likely to continue their upward trend over the next year, supported by scaling operations, enhanced operating efficiencies, and a healthy cash conversion rate. The agency projects Prism's revenue could surpass Rs 92 billion (approximately $1 billion) in fiscal year 2026, up from Rs 62.5 billion in fiscal year 2025. This projection accounts for the full integration of G6 Hospitality LLC, acquired by Prism in fiscal year 2025. Additionally, the company's revenue is anticipated to grow by approximately 15% in fiscal year 2027, driven by the group's move towards premium offerings, the addition of new assets, and robust same-storefront growth rates.