Author: Dev Patel | EQMint | IPO News
New Delhi, November 1, 2025 — IPO-bound hospitality firm Oyo’s parent company, PRISM (Oravel Stays Ltd), has initiated a new set of corporate actions signaling that its long-anticipated public listing may be nearing. The company has moved to increase its authorised share capital, issue bonus preference shares, and grant sweat equity to independent directors — steps that are seen as final-stage structuring measures before filing its Draft Red Herring Prospectus (DRHP).
According to sources close to the matter, Oyo plans to file its DRHP with market regulator Sebi in November 2025, targeting a valuation between USD 7 billion and USD 8 billion. The latest move aligns with a broader internal restructuring exercise aimed at strengthening its corporate governance framework and simplifying its capital structure in preparation for a public market debut.
Authorised Share Capital Increased Ahead of IPO
PRISM has proposed to increase its authorised share capital from ₹2,431.13 crore to ₹2,433.13 crore by adding 20 lakh Compulsorily Convertible Preference Shares (CCPS) of ₹10 each.
In a communication to shareholders, the company said,
“The increase in authorised share capital is in addition to the earlier increase already approved by the Board and shareholders, undertaken as part of the company’s preparations for its proposed IPO and other fund-raising transactions.”
The move follows shareholder approvals in August and September 2025, both aimed at expanding the company’s capital base and facilitating new issuances related to the upcoming IPO.
Industry observers view the increase as a standard preparatory measure, allowing flexibility for future equity issuance and conversion of preference shares as Oyo transitions toward becoming a listed company.
Bonus CCPS for Shareholders
As part of its latest corporate restructuring, PRISM has also proposed issuing bonus CCPS to existing shareholders in the ratio of 1 bonus CCPS for every 6,000 equity shares held.
The CCPS will be non-redeemable and compulsorily convertible into equity shares, and will be capitalised from the company’s free reserves and securities premium account.
According to insiders, the move is designed to reward existing shareholders and bring uniformity to the company’s capital structure. “These actions are part of a multi-pronged IPO structuring effort,” said a source familiar with the development. “They are meant to simplify PRISM’s capital framework, reward shareholders, and align corporate governance with public-market standards.”
Sweat Equity for Independent Directors
In addition to capital expansion, PRISM has also proposed the issuance of 4.75 million equity shares (47,46,768 shares) as sweat equity to Independent Directors Troy Matthew Alstead and William Steve Albrecht, valued at ₹37.12 per share.
These shares, which will be locked in for three years from allotment, form part of the directors’ compensation for their strategic contributions and governance oversight.
The company noted that this issuance recognizes the “value addition and professional contribution” of its independent directors, who have played key roles in shaping Oyo’s governance and compliance mechanisms over the last few years.
Alstead, a former Starbucks COO, and Albrecht, a governance and audit expert, have been instrumental in strengthening Oyo’s board structure and financial accountability as the company prepared for its eventual listing.
IPO Preparations Enter Final Phase
The latest developments indicate that PRISM’s IPO preparations are in their final phase. The proposed adjustments — including capital expansion, bonus issuance, and governance alignment — are being executed in anticipation of Oyo’s upcoming DRHP filing with the Securities and Exchange Board of India (Sebi).
Sources confirmed that the filing process is “at an advanced stage,” with the company expected to seek approval in the coming weeks.
Oyo, founded by Ritesh Agarwal in 2013, has spent the last year restructuring operations, cutting costs, and streamlining its business model to return to profitability ahead of its market debut.
The company’s IPO will mark one of the largest public listings in India’s travel and hospitality sector, representing a significant milestone for both Oyo and India’s broader startup ecosystem.
Corporate Governance and Market Alignment
The company’s governance reforms — including new independent board appointments and tighter compliance policies — are being viewed as part of its broader effort to align with public-market expectations.
Industry analysts say that the steps taken by PRISM reflect lessons learned from earlier IPO delays and regulatory feedback. “Oyo has spent the last two years refining its financial and governance structure,” said a venture capital analyst. “By issuing sweat equity to independent directors and rationalizing its capital base, PRISM is ensuring that its governance framework meets global investor standards.”
The appointment of seasoned independent directors and the issuance of governance-linked equity underscore the company’s commitment to transparency and long-term accountability.
Aiming for a $7–8 Billion Valuation
When Oyo first considered listing in 2021, global market conditions and internal restructuring led to multiple delays. However, sources now confirm that the company has revived its IPO ambitions with a revised valuation target of $7–8 billion, reflecting its improved financial performance and asset-light business model.
Oyo has significantly reduced debt, improved cash flows, and expanded its franchise-led model across India and international markets such as Southeast Asia, the Middle East, and Europe.
Analysts note that the company’s turnaround story, backed by a focus on profitability and technology-driven efficiency, could attract both institutional and retail investors once the IPO opens.
What’s Next for PRISM and Oyo
The upcoming IPO is expected to include a fresh issue of shares as well as an offer for sale (OFS) by existing investors. The proceeds are likely to be used for debt repayment, technology investments, and global expansion.
The proposed capital expansion ensures that PRISM has sufficient authorised share capital to accommodate these issuances. With regulatory approvals expected in the coming months, the company could list on Indian exchanges as early as the first half of 2026, depending on market conditions.
Industry Outlook
Oyo’s IPO comes at a time when several Indian unicorns — including Swiggy, Ola Electric, and PayU — are preparing for their own public listings. The move signals a renewed phase of confidence in India’s tech IPO market after a period of subdued activity.
If successful, Oyo’s listing could re-establish investor confidence in Indian startups’ ability to transition into mature, publicly traded enterprises with strong governance frameworks.
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Disclaimer: This article is based on information available from public sources. It has not been reported by EQMint journalists. EQMint has compiled and presented the content for informational purposes only and does not guarantee its accuracy or completeness. Readers are advised to verify details independently before relying on them.
