Zostel has withdrawn its latest application before the Delhi High Court seeking directions to SEBI over disclosures in PRISM's proposed ₹6,650 crore IPO, particularly concerning Zostel's claimed nearly 7% stake in OYO's parent. The court allowed the withdrawal with liberty to approach it again at an appropriate stage.
Zostel had alleged that PRISM's updated IPO papers did not adequately disclose the long-running dispute and its claimed equity entitlement. The court declined to intervene at this stage, noting that SEBI could examine Zostel's objections under applicable law.
The underlying dispute dates back to OYO's proposed 2015 acquisition of Zostel's business. While Zostel maintains that it is entitled to a stake arising from the transaction, PRISM argues that the term sheet was non-binding and exploratory. A May 2025 Delhi HC ruling set aside the arbitral award that had supported Zostel's claim; Zostel's challenge remains pending.
For PRISM, the withdrawal removes an immediate court intervention in the IPO process, but the substantive dispute remains unresolved and could continue to be relevant from a disclosure and litigation-risk perspective as the IPO progresses.
