Moody's upgrades outlook on OYO parent Prism ahead of IPO

Moody's Ratings upgraded the outlook on Prism, the parent entity of budget hospitality chain OYO, while maintaining the company's B2 corporate family rating. The positive outlook reflects expectations that OYO will sustain robust earnings and free cash flow generation over the next 12-18 months, enabling further debt reduction while preserving strong liquidity positions.

"OYO's leading position in the budget accommodation sector across its key operating markets, combined with geographic diversification spanning India, Europe, and the United States, underpins the affirmation of its B2 rating," the agency noted in its assessment.

Moody's projects OYO's EBITDA to expand to approximately Rs 3,000 crore (USD 315 million) in the coming period, underscoring the company's improving operational performance. The rating action comes as the travel-tech company progresses toward its anticipated initial public offering, a move that would mark a significant milestone for one of India's most prominent startup unicorns.

The positive outlook signals growing investor confidence in OYO's ability to sustain profitability and manage its capital structure effectively. The company has undergone substantial restructuring in recent years, consolidating its global operations and improving unit economics across its accommodation platform.