Oyo parent Prism Johnson files updated IPO papers, seeks Rs 6,650 crore

Prism Johnson, the parent company of hotel aggregator Oyo, filed updated IPO papers with the Securities and Exchange Board of India on Monday. The fresh issue component stands at Rs 6,650 crore. An offer-for-sale component of up to Rs 1,250 crore from existing shareholders is also included.

The filing follows a previous draft prospectus that lapsed in 2023. The company had initially sought an Rs 8,430 crore IPO in 2021. That plan was shelved amid market volatility and valuation concerns. The new papers reflect a roughly 21% smaller ask and a narrower shareholder sell-down.

The OFS includes shares from SoftBank Group, which holds about 46% of Prism Johnson through its Vision Fund. Other selling shareholders include Sequoia Capital and Lightspeed Venture Partners. The company itself will use the fresh issue proceeds for debt repayment, working capital, and general corporate purposes.

Prism Johnson reported a net loss of Rs 1,286 crore for the financial year ended March 2024. That narrowed from a Rs 1,583 crore loss the prior year. Revenue rose 14% to Rs 5,463 crore. The company's hospitality business, which includes Oyo's hotel and home-stay network, generated 92% of total revenue.

The IPO will test whether public-market investors assign a valuation similar to the private-market rounds that valued Oyo at $9 billion in 2021. Since then, the company has faced slower-than-expected recovery in travel demand in some markets. Regulatory scrutiny over its business practices in India and Southeast Asia has also persisted.

Kotak Mahindra Capital, Morgan Stanley, and J.P. Morgan are the lead managers for the issue. The company has not set a price band or timeline for the IPO. The filing suggests a launch before the end of the calendar year.

For investors, the central question is whether the lower valuation and narrower loss trajectory are enough to attract demand. The company's hotel inventory has grown to 235,000 rooms across 35 countries. Unit economics – particularly the share of revenue that flows to Oyo versus hotel partners – remains a point of debate among analysts.

Prism Johnson's updated papers also include a risk factor section. It flags potential adverse impacts from the company's ongoing legal disputes with hotel owners. The outcome of regulatory reviews in Indonesia and the UAE is also cited. The company said it has set aside provisions for these matters. It did not disclose the amount.