OYO parent PRISM is planning to nearly halve the size of the fresh issue in its proposed initial public offering (IPO) to up to Rs 3,350 crore from almost Rs 6,650 crore, sources said on Tuesday.
People familiar with the matter told PTI the reduction in the issue size follows continued strong cash generation and an improving balance-sheet position, which has lowered the amount of capital the company needs to raise compared with what was originally envisaged.
"The original issue was sized before the company's more recent financial performance came through. With cash generation remaining strong and the balance sheet improving, the funding requirement has come down, allowing the company to reduce the amount of primary capital it raises.
"The objective is to raise what the business needs while keeping the capital structure efficient. The plan is to repay the residual debt over the next two to three years through cash flows generated by the business," a person familiar with the matter said.
Earlier, OYO had planned to raise up to Rs 6,650 crore through an IPO, of which around Rs 5,000 crore was intended for debt repayment.