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.
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 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.
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 platform’s portfolio.
Still, Oravel remains dependent on its core 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.
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.