OYO’s IPO Set for Final SEBI Approval This Week with Reduced Issue Size of ₹6,500 Crore.

OYO’s parent company, PRISM, is poised to receive its final nod from SEBI for the much-anticipated IPO, which is set for the coming months. The issue size has been marginally reduced from ₹6,650 crore to ₹6,500 crore, a conservative adjustment indicating careful consideration by the bankers regarding market absorption. This IPO represents OYO’s third attempt to access the public markets, following a failed attempt in 2021 and another lapse in 2023. This time, OYO is in a different position: the company has achieved profitability and has demonstrated strong quarterly performance trajectories.

The recent financial results support OYO’s optimistic outlook, with Q1 FY26 showcasing marked improvement in crucial metrics. The company reported a net profit of over ₹200 crore, up significantly from ₹87 crore the previous year. Additionally, revenue from operations surged by 47% to ₹2,019 crore, bolstered by a 144% increase in gross booking value. Targeting a valuation of $7 to $8 billion, PRISM aims for a pricing band of around ₹70 per share, focusing on debt repayment and strategic investments post-IPO.

For Indian retail investors, this IPO presents a noteworthy opportunity amidst a cautious market sentiment. As investors evaluate the final price band, they should be mindful of comparing OYO’s valuation with global hospitality peers, given it is priced at 25 to 30 times EBITDA. Furthermore, the presence of significant stakeholders, such as SoftBank and Microsoft, introduces complexities in the potential lock-in dynamics post-listing. Historical trends also suggest that expectation management is crucial, as early IPOs have yielded minimal gains recently. Investors should approach this IPO with strategic foresight and due diligence.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova IPO team.)