mumbai/new delhi, July 1 -- Hospitality firm Oravel Stays Ltd, parent of Indian travel platform Oyo, plans to raise Rs.6,650 crore in an initial public offering, three-fourths of which will go to repay or prepay debt, its updated draft share sale papers showed. The initial public offering (IPO) will not have an offer for sale, meaning existing investors including SoftBank and founder Ritesh Agarwal will retain their holdings. Oravel has to repay Rs.7,044 crore on a five-year debt facility from Deutsche Bank AG, which it raised in 2021. The company had accounted Rs.1,089 crore as finance costs for the nine months ended December 2025. Like other prospectuses that detail risks for investors, the updated draft red herring prospectus (UDRHP) listed operational and regulatory risks. A request for comments sent to Oravel representatives remained unanswered. Oravel's UDRHP shows the entire share capital of a key promoter entity has been indirectly pledged to secure a three-year external financing facility, the terms of which might potentially trigger a change in corporate control in the event of a debt default. The filing shows that Oyo founder Agarwal indirectly holds 100% of Preferred Hospitality Holdings (Cayman), or PHH. PHH, in turn, has 100% ownership of RA Co, a classified promoter company that holds 3.19 billion shares in Oravel, representing a 20.12% stake on a fully diluted pre-issue basis. PHH entered into an external financing facility effective 30 October, 2025, with a tenure of three years. To secure this arrangement, it pledged 100% of the share capital of RA Co to DB International Trust (Singapore) Ltd, a subsidiary of Deutsche Bank AG. A person in the know, meanwhile, said the loan facility "continues to perform as intended", adding the arrangement "has successfully navigated multiple market cycles, including the covid-19 pandemic and the global interest rate tightening cycle". The package extends beyond Prism and "includes interests in a broader portfolio of high-quality unicorns".Prism is the new corporate parent name for Oravel, the holding company that owns and operates Oyo. While Oravel has not disclosed the particular underlying facility documents, the events of default in promoter financing of this nature are fairly standard, explained Archana Balasubramanian, partner at Agama Law Associates. "The most sensitive is usually the financial covenant package: loan-to-value or security-cover ratios tied to the value of the pledged shares, where a fall in implied value can require a top-up or trigger acceleration without any payment default at all."...