Moody's upgrades Oyo parent Prism's outlook to positive, keeps B2 rating

Moody’s Ratings revised the outlook on IPO-bound Oyo parent Prism from stable to positive and maintained its B2 corporate family rating. Analyst Sweta Patodia said the positive outlook reflects expectations that Oyo will sustain higher earnings and free-cash-flow generation over the next 12-18 months, aiding deleveraging while preserving strong liquidity. Moody’s projects Oyo’s EBITDA to reach around Rs 3,000 crore in that period, after FY26 EBITDA more than doubled to Rs 2,630 crore.

The agency also noted that Oyo generated positive free cash flow in FY26 for the first time in years and is expected to continue doing so, covering near-term outflows. Oyo intends to raise about Rs 6,650 crore through an IPO, using roughly Rs 5,000 crore to repay debt, which would further improve its credit profile. Founder Ritesh Agarwal holds a 30.52% stake, while SoftBank’s SVF India Holdings (Cayman) Limited is the largest shareholder with 40.04%.