Moody's upgrades outlook for parent company Oyo ahead of IPO to 'positive'

Moody's Ratings has revised the outlook for Prism, the parent company of Oyo, which is preparing for an Initial Public Offering (IPO), changing it from 'stable' to 'positive'. The rating agency also confirmed the corporate family rating of B2 for this travel tech unicorn.

Suveta Patodia, Assistant Vice President at Moody's Ratings, noted that the positive outlook is based on the expectation that Oyo (formerly known as Oravel Stays) will be able to sustain stronger revenue growth and free cash flow generation over the next 12–18 months. This, she said, will contribute to further debt reduction while maintaining very good liquidity.

Patodia, who is a lead analyst for Oyo at Moody's, also emphasized that the confirmation of the B2 CFR rating reflects Oyo's leading position in the budget accommodation segment in key markets, as well as the geographical diversification of its operations in India, Europe, and the US.

Rationale for Rating Changes

Moody's explained the reason for the forecast adjustment by stating that it expects Oyo's EBITDA to grow to approximately 300 billion rupees ($315 million USD) over the next 12–18 months as the company scales and adds new sales points to its platform. Furthermore, Oyo's EBITDA is expected to more than double in fiscal year 2026, reaching 263 billion rupees compared to 108 billion rupees in fiscal year 2025.

Thanks to increased revenues and stabilized working capital outflow, Oyo was able to generate positive free cash flow for the first time in several years in fiscal year 2026. Moody's forecasts that Oyo will maintain positive free cash flow for the next one to two years, with operating cash flow covering short-term expenses, including planned capital expenditures.

Oyo plans to raise about 665 billion rupees through the IPO, of which approximately 500 billion rupees will be used to repay debt. Moody's warned that if the offering proceeds as planned, it will accelerate debt reduction and strengthen the company's credit profile; however, given the uncertainty regarding the timing and execution of the IPO, the agency's base financial forecasts do not include the funds raised or the related debt repayment.

Oyo was founded in 2013 by Raish Agarwal, who currently owns 30.52 percent of the shares. The largest shareholder is SVF India Holdings (Cayman) Limited, a subsidiary of SoftBank Group Corp, holding 40.04 percent of the shares.

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iol.co.zaOctober 15, 10:34

Moody's signals potential credit rating upgrade for South Africa contingent on sustained fiscal improvements

South Africa may approach a credit rating upgrade from Moody's Ratings, but this depends on the government's ability to demonstrate sustained improvements in public finances.

According to Bloomberg, Moody's Vice President Evan Wohlmann stated that the agency could upgrade South Africa's rating if its fiscal indicators continue to improve. However, this possibility remains conditional, as the announcement of the medium-term budget policy next week will be an important test of the government's commitment to fiscal discipline.

During a virtual press briefing on Tuesday, Wohlmann noted that Moody's will look for evidence that the government is capable of containing spending pressures, increasing revenue collection, and ensuring a sustainable reduction in public debt.

Positive Signal

Currently, the agency rates South Africa at Ba2, which is two levels below investment grade. In May, Moody's changed its outlook from 'stable' to 'positive,' signaling the possibility of a rating upgrade, although the rating itself remained unchanged.

However, a positive outlook does not guarantee an upgrade. South Africa needs to prove that its improving financial position can withstand the test of time and is not merely a temporary result of stronger income or better-than-expected budget execution.

According to Business Day, Moody's forecasts that public debt will peak at around 87% of GDP in the 2025/26 fiscal year, after which it will gradually decrease to approximately 84% by 2030.

Crucial Step

Naturally, a stronger economy will help the government increase revenues and reduce debt relative to the size of the economy. But a slowdown in growth or a prolonged energy price shock could complicate efforts to stabilize public finances.

The timing of this latest update from Moody's is significant, as Finance Minister Enoch Godongwana is scheduled to present the Medium-Term Budget Policy Statement on October 21. This briefing is expected to provide a clearer picture of the government's plans regarding revenue, expenditure, and borrowing.

Any improvement would mark a significant step toward regaining investment grade status with Moody's, which last upgraded South Africa's rating in 2009.

uzdaily.uzOctober 5, 10:00

Fitch confirms Universal Bank's rating at B- and VR at b-

The international rating agency Fitch Ratings has confirmed the long-term issuer ratings (IDRs) of Universal Bank JSC in both foreign and local currencies at B-, with the outlook remaining stable. The agency also confirmed the bank's viability rating (VR) at b-.

According to the agency's assessment, this rating reflects the bank's independent creditworthiness. However, the assessment is limited by several factors: limited market positions, a small share in Uzbekistan's banking sector, rapid lending growth, and high concentration of the loan portfolio.

Among the positive aspects noted by Fitch are a low proportion of non-performing loans, high profitability, as well as sufficient capital and liquidity buffers.

Fitch adjusted its assessment of the operating environment for banks in Uzbekistan, raising it from b with a positive outlook to b+ with a stable outlook. The agency attributes this to progress in banking reforms, including strengthened regulation and the elimination of accumulated risks.

The combination of an improved operating environment and stable business conditions should support the sustainability of the banks' credit profiles. Furthermore, Fitch noted Uzbekistan's economic growth at 8.5% year-on-year in the first half of 2026.

Universal Bank remains a small player in the Uzbek banking market. As of the end of the first half of 2026, its assets accounted for less than 1% of the total banking sector assets. The bank primarily operates in the Fergana region, focusing on financing small and medium-sized enterprises, unsecured retail lending, and payment and transaction services.

The majority of lending consists of short-term loans for working capital financing. The share of foreign currency loans increased to 31% by the end of the first half of 2026, up from 23% at the end of 2025. Fitch pointed out that some foreign currency loans were issued to borrowers focused on the domestic market who do not have foreign currency earnings.

Risks associated with related-party lending remain volatile. By the end of 2025, they constituted 2.5% of the loan portfolio, down from 10% the previous year.

According to Fitch, the proportion of non-performing loans at Universal Bank classified as Stage 3 under IFRS was 1% of the gross loan portfolio at the end of 2025. This amount was fully covered by provisions for possible loan losses. Stage 2 loans amounted to 2%. Fitch forecasts that the proportion of non-performing loans will remain generally stable in 2026, as improvements in part of the portfolio will be offset by the emergence of new problematic loans.

Fee income plays a significant role in the bank's revenue. In the first half of 2026, it accounted for 51% of operating income. The return on risk-weighted assets (RWA) increased to 6.7% in 2025 from 5.1% in 2024. Fitch expects this ratio to remain around 6% during the 2026–2027 period.

Universal Bank's basic capital ratio increased to 18% by the end of 2025 compared to 16.8% the previous year. The growth was supported by high profitability and moderate dividend payments. As of the end of the first half of 2026, the Tier 1 capital adequacy ratio and the overall capital adequacy ratio of the bank were 14% and 17.1%, respectively. These indicators provided a buffer above regulatory minimums of 10% and 12%.

Fitch believes that internal capital formation will continue to support the bank's capitalization, given the growth in risk-weighted assets and moderate dividend payments.