Oyo plans to raise around Rs 6,650 crore through an initial public offering (IPO), of which around Rs 5,000 crore would be used to repay debt
Moody's Ratings has revised the outlook on IPO-bound Oyo parent Prism to 'positive' from 'stable', while reaffirming the travel tech unicorn's B2 corporate family rating.
"The positive outlook reflects our expectation that Oyo (formerly Oravel Stays) will sustain stronger earnings and free cash flow generation over the next 12-18 months, supporting further deleveraging while maintaining very good liquidity," said Sweta Patodia, a Moody's Ratings Assistant Vice President.
"The affirmation of the B2 CFR (corporate family rating) reflects Oyo's leading position in the budget accommodation sector across its key operating markets, as well as the geographic diversification of its operations across India, Europe, and the US," said Patodia, who is the lead analyst for Oyo, Moody's stated.
Explaining the rationale behind ratings, Moody's said, We expect Oyo's EBITDA (earnings before interest, taxes, depreciation and amortisation) to grow to around Rs 3,000 crore (USD 315 million) over the next 12-18 months as the company continues to scale and add new storefronts to its platform.