OYO’s third IPO attempt is built on an American acquisition, thinner booking margins and a listing whose proceeds will largely repay the debt used to fund that transformation.
OYO's parent company, Prism (formerly Oravel Stays), is making its third attempt to go public at a reported valuation of $7-8 billion. On June 30, 2026, it filed updated papers with SEBI to raise ₹6,650 crore through new shares, following failed attempts in 2021 and 2023. All the money raised will go directly to the company, as no current investors, including SoftBank, Microsoft, Airbnb, or founder Ritesh Agarwal, are selling their shares.
On paper, this seems like a straightforward growth-stage listing of a company that has finally turned profitable, raising capital to strengthen its balance sheet.
However, a closer look at the UDRHP-I reveals certain important nuances.
83.77% of Prism's revenue now comes from outside India. The business that Agarwal built to standardize India's budget hotels now only earns 16.23% of its revenue there. Moreover, three-quarters of the IPO proceeds are earmarked to repay debt from a single American acquisition and a significant share of the profit supporting this listing is non-recurring by the company's own accounting.
So while the ‘brand’ going public is Indian, the business described in the filing is something else.
How OYO Stopped Being An India Story
Ritesh Agarwal was seventeen when he dropped out of college and began traveling India on a Thiel Fellowship stipend, taking notes on what was broken about the country's budget hotels resulting in observations like no consistent signal, no standard, no way to know in advance whether a room would be clean or usable. OYO was built around fixing that specific problem, starting with five hotels in Gurugram in 2013.
Between 2015 and 2019, backed by SoftBank's Vision Fund and its growth-at-all-costs playbook, OYO raised $3.32 billion, scaled to 43,000 properties across 80 countries, hitting a $10 billion valuation.
However, this growth eventually outran the business. Hotel partners in India revolted through 2019, with protests breaking out across multiple cities over guaranteed minimum payments that had stopped arriving and several partners taking legal action against the company. China, where OYO had rapidly scaled to 500,000 rooms, never turned profitable and the company eventually exited the market entirely. COVID then collapsed occupancy across a network whose minimum-guarantee model meant OYO owed hotel owners money regardless of whether rooms were filled.
A first IPO attempt in 2021, seeking a $9 billion valuation, was withdrawn after SEBI raised concerns about revenue recognition and related-party transactions. A second attempt in 2023, at a reduced valuation target of roughly $2.5-3 billion, was withdrawn in 2024 after the muted investor interest, fears over low valuations by Softbank and the company's ongoing debt refinancing that rendered its filed financials out of date.
What followed was a long restructuring process in which OYO exited 150,000+ unprofitable rooms, shut down money-losing markets, cut headcount from 17,000 to around 1,500, and focused on reaching profitability. By FY24, it reported its first-ever annual profit: ₹229 crore. However, the profit was no longer from a sustainable business – but from downsized operations and accounting entries of deferred tax credits. The India business was now a fraction of its size and barely growing even in a resurgent post covid ‘revenge travel’ surge.
Afterwards, came the deal that turned the company into what it is today.
Image Generated via AI for representational purposes
In September 2024, Oravel Stays bought G6 Hospitality from Blackstone for $525 million in cash. G6 is the American parent of Motel 6 and Studio 6, with roughly 1,500 properties across the US and Canada, $1.7 billion in annual gross room revenue, and a budget lodging brand that has existed since 1962. By comparison, OYO’s own five-year push into the US had produced only around 320 hotels. The deal gave OYO what it had not been able to build organically: instant US scale, a recognised economy-lodging brand, an existing franchise network and a large EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization ) contributor ahead of its IPO.
The price also reveals why the transaction was of importance. G6 was expected to contribute more than ₹630 crore, or about $75 million, of EBITDA in its first full year, putting the acquisition at roughly 7x forward EBITDA, which was cheaper than the multiples at which listed US economy lodging franchisors such as Wyndham trade. Blackstone had reportedly been exploring a sale since 2022. However, obvious strategic buyers such as Wyndham and Choic, could have faced antitrust concerns, while private equity had less room to extract more from a business already converted into a fee-led franchise model. OYO became the buyer with the clearest need. It needed US scale, reported EBITDA and a mature brand large enough to reset its IPO story, and G6 gave it all three in one transaction.
Growth Went American But Margin Didn't Follow At The Same Rate
The US now accounts for 52.39% of Prism's global Gross Booking Value, the total monetary value of all bookings flowing through the platform, ahead of India and Europe combined. On that measure alone, OYO looks like a majority-American business.
However, against ₹12,022 crore of US GBV, its actual US revenue was about ₹1,879 crore, less than 16% of the total booking value. India, by contrast, generates just 11.91% of global GBV but accounts for 16.23% of revenue, a smaller business in absolute terms, but one where OYO retains a significantly larger share of every booking. The company's center of gravity is shifting toward the market where it keeps the least per rupee booked.
This gap comes down to a major shift in how OYO makes money. In India, OYO takes a massive 20% to 30% cut of every booking. But its new US acquisitions (Motel 6 and Studio 6) operate like traditional hotel franchises, earning smaller brand-licensing fees instead of high commissions. They are now capturing a thinner slice of a much larger pie.
OYO’s own performance metrics show this shift. In FY23, revenue made up nearly 54% of its bookings value. By early FY26, that crashed to just 30%. OYO has traded a tightly controlled, high-commission model for a looser franchise system, shrinking its profit margins in the process.
An IPO to Fund Debt Repayment
Prism is raising ₹6,650 crore, but three-quarters of that money (₹4,987.5 crore, roughly $526 million) is going straight to paying off the loan taken out by its Singapore subsidiary to finance the Motel 6 acquisition. The acquisition itself cost $525 million. The numbers are nearly identical and therefore Indian investors are, in effect, being asked to cover the entire cost of an American acquisition.
Additionally, founder Ritesh Agarwal has massive personal debt separate from the company. In 2019, guaranteed by SoftBank's Masayoshi Son, he borrowed $2.2 billion to buy back stakes from early investors at OYO's $10 billion peak. Roughly $383 million of that remains due in 2027, a deadline his creditors agreed to only on the condition that OYO listed. To secure the loan, 100% of the shares in RA Hospitality Holdings, the vehicle through which Agarwal holds 20.12% of Prism, are pledged as collateral. If he defaults, those shares transfer to his lenders.
What The Filing Shows, Taken Together
OYO built its name and its brand equity on a particular promise: standardizing India's budget hotels. The company described in its own SEBI filing is one whose growth, risk, and debt now sit largely elsewhere. This IPO settles the financial cost of that transition. Whether Indian investors pricing it understand what they are actually buying into is a question the filing raises but does not answer.