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MakeMyTrip to raise $495 mn from new and existing investors

To raise $330 mn from existing investors, eyes another $165 mn from undisclosed investors

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Nasdaq-listed MakeMyTrip, India's largest online travel services company, is raising $495 million (Rs 3,175 crore) through placement of its shares with a clutch of existing as well as new investors.

Under the terms of agreements, MakeMyTrip, set up in 2000 by Deep Karla and Keyur Joshi, will issue 4.58 million shares to undisclosed investors at a price of $36 a share aggregating $165 million.

It would also simultaneously raise $330 million through issue of shares to its existing investors like Ctrip.com International of China, and MIH Internet SEA Pte Ltd.

MIH Internet was the erstwhile holding company of ibibo Group Holdings (Singapore) Pte, which was fully acquired by MakeMyTrip early this year.

With the merger of ibibo Group, MakeMyTrip has now created one of the country’s largest travel groups providing a one stop shop for Indian travellers through brands like MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 million transactions during the fiscal year 2016.

Existing investor Ctrip would be issued 916,666 shares while MIH would get 3.66 million Class B shares at a price of $36 per share which would be later converted into ordinary shares at 1:1 ratio, MakeMyTrip said in a statement.

“The company expects the closing of placement and the transactions with Ctrip and MIH to occur on or around 5 May 2017. Proceeds from the transactions will be used to fund business expansion, strategic investments, technology and product development, marketing and promotions, working capital and general corporate purposes,” it said.

With this deal, Ctrip, which was MakeMyTrip’s single-largest investor as on March 2016 holding 16.58%, would be consolidating its position in the travel website.

Other major investors, apart from Kalra who holds 9.95% stake, are SAIF Partners (14.41%) Travogue (7.11%) Wasatch Advisors (10.79%), and T Rowe Price (9.66%).

During the nine months ended December 2016, MakeMyTrip earned a revenue of $189 million calculated at an exchange rate of Rs 67.1 to a dollar, its earnings being split almost equally between income from air ticketing and receipts from hotels and packages.

It, however, suffered a loss of $5.9 million in the December against a bigger loss of $14.8 million a year back.

Makemytrip Inc, headquartered in Gurgaon, provides online travel services including flight tickets, domestic and international holiday packages, hotel reservations, rail and bus tickets.

In addition to a full-service online portal, the company also operates through 65 retail stores across 50 cities in India, along with international offices in New York City and Sydney.

...& ANALYSIS

  • Ctrip would be issued 916,666 shares while MIH would get 3.66 million Class B shares which would be later converted into ordinary shares at 1:1 ratio
     
  • Proceeds to be used for business expansion, strategic investments, technology & product development, marketing & promotions, working capital
     
  • With this deal, Ctrip, which was MakeMyTrip’s single-largest investor as on March 2016, would be consolidating its position in the website
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