(Image Source: The Economic Times)
Oravel Stays Pvt Ltd, the parent entity behind OYO Rooms, branded as PRISM Hospitality, has secured crucial shareholder approval to raise up to Rs 6,650 crore through a fresh issue of equity shares. The resolution passed with strong investor support during an extraordinary general meeting, bringing OYO’s much-anticipated IPO listing plan significantly closer to reality. This development marks a key milestone for the hospitality chain that has navigated multiple delays and valuation resets since filing its draft red herring prospectus in 2021.
The fundraising approval comes at a time when India’s IPO market remains robust, with retail and institutional investors showing sustained appetite for consumption and technology-enabled businesses. OYO’s move reflects confidence in the current market environment and the company’s operational turnaround under its current leadership.
PRISM Shareholder Vote Details and Fundraising Scope
Shareholders approved the issuance of equity shares aggregating up to Rs 6,650 crore at their discretion, thereby providing management with the flexibility to time the capital raise optimally. The funds will support business expansion, technology investments, and debt repayment as OYO aims to consolidate its position in India’s competitive hospitality sector. This amount represents a substantial portion of the company’s planned IPO size, with final quantum subject to market conditions and regulatory approvals.
The approval process saw near-unanimous support from institutional investors, signaling confidence in OYO’s growth trajectory and governance improvements. Key highlights from the shareholder vote include:
– 99.98% approval from equity shareholders on the fresh issue resolution
– Strong backing from promoter and institutional investor blocs
– No significant dissent from minority shareholders
– EGM conducted in compliance with SEBI and Companies Act requirements
– Resolution enables board to proceed with IPO pricing and allotment decisions
This overwhelming mandate removes a major hurdle that had delayed OYO’s listing timeline amid previous valuation concerns and market volatility.
OYO IPO Listing Timeline and Valuation Expectations
With shareholder approval secured, OYO now focuses on finalizing its updated draft red herring prospectus with SEBI and roadshows for anchor investors. Market sources indicate the company aims for a Q1 2026 listing window, capitalizing on favorable seasonal demand patterns in the hospitality sector. The IPO structure will combine fresh issuance for growth capital with an offer for sale, allowing early investors and promoters to exit partially.
Valuation expectations have moderated significantly from OYO’s peak $10 billion private market valuation in 2019. Current estimates place the IPO valuation between Rs 25,000 crore to Rs 30,000 crore, reflecting improved profitability metrics and a more realistic multiple for hospitality tech platforms. The company reported its first full-year profit in FY25, driven by asset-light franchising expansion and cost optimization.
Strategic Importance for OYO’s Hospitality Expansion Plans
The Rs 6,650 crore fundraising will fuel OYO’s ambitious growth roadmap targeting 1 million rooms under management by FY28. Key deployment areas include:
– Technology platform enhancements for personalized guest experiences
– Geographic expansion into tier 2/3 cities and international markets
– Inventory diversification across budget, midscale, and premium segments
– Debt reduction to strengthen the balance sheet ahead of listing
– Marketing investments to capture peak travel seasons
OYO’s pivot toward asset-light operations has shown results, with revenue growth of 25% year-on-year in recent quarters and EBITDA margins expanding to double digits. The company’s franchise model now spans over 18,000 properties across 800 cities, positioning it as India’s largest hotel chain by room count.
Market Context and Investor Sentiment for Hospitality IPOs
OYO’s IPO timing aligns with strong market reception for hospitality peers like Juniper Hotels and Lemon Tree, which delivered solid listing gains. Investor interest in travel recovery stories remains high following the post-pandemic consumption boom. Domestic mutual funds and high-net-worth individuals have shown a particular appetite for mid-cap hospitality plays offering growth at reasonable valuations.
The shareholder approval also validates OYO’s corporate governance enhancements, including independent board composition and transparent financial reporting. SEBI’s ongoing scrutiny of IPO pricing ensures investor protection while allowing market discovery of fair value. For OYO, converting this mandate into a successful listing will mark the end of a long journey from startup unicorn to publicly accountable enterprise.
As PRISM advances toward SEBI observations and pricing, all eyes remain on execution quality and final valuation discipline. The Rs 6,650 crore war chest positions OYO to aggressively capture India’s burgeoning budget hospitality market while rewarding patient long-term investors.
