Key facts
- S&P Global Ratings revised Prism's outlook to 'Positive' from 'Stable'.
- The rating agency affirmed Prism's 'B' issuer credit rating on its senior secured term loan.
- Prism, the parent company of Oyo, has received approval for its initial public offering.
- S&P anticipates significant improvement in Prism's credit metrics within 12 months.
- A successful IPO is expected to improve Prism's capital structure by converting debt-like instruments to equity.
- Prism's revenue is projected to exceed Rs 92 billion in fiscal 2026, with further growth in fiscal 2027.
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.