OYO's parent company, PRISM, is planning to significantly reduce the size of its fresh issue in the proposed initial public offering (IPO) to up to ₹3,350 crore from nearly ₹6,650 crore. This decision comes as the company experiences improved cash generation and a stronger balance sheet.

Background

Sources revealed that the reduction in the IPO size is a response to the company's recent financial performance. The original issue size was determined before the company’s cash flow situation improved.

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"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," said a source familiar with the matter.

Financial Strategy

The primary goal of this revised IPO structure is to raise only what is necessary for the business while maintaining an efficient capital structure. The company plans to use the proceeds primarily for debt repayment over the next two to three years, leveraging cash flows generated by its operations.