MakeMyTrip Raises $2.5 Billion for Strategic Exit from Trip.com Group
MakeMyTrip, a major player in online travel booking, is in the process of obtaining over $2.5 billion aimed at enabling a partial exit for Trip.com Group, a leading online travel agency (OTA) based in China. This is set to be achieved through the buyback of previously acquired Class B shares.
The company has unveiled plans for a primary offering that consists of 1.4 crore equity shares, with the final pricing not yet finalized. This offering is expected to be accompanied by convertible notes amounting to up to $1.25 billion, according to Nasdaq filings.
Current Stock Performance and Potential Proceeds
Currently, MakeMyTrip’s stock is trading at $100.88. Based on estimates from Startup Superb, even if the primary shares are priced at a 10% discount to the current market price, the firm could potentially raise around $1.27 to $1.3 billion through equity issuance alone. When combined with the convertible notes, total proceeds could enable a strategic exit of approximately $2.5 billion.
Strategic Move to Reduce Chinese Holdings
According to MakeMyTrip, all proceeds from the primary equity and note offerings will be allocated to repurchase a portion of Class B shares from Trip.com Group Limited. This represents a strategic effort by MakeMyTrip to decrease Chinese ownership by nearly half, reducing it by over 20%.
Ownership Structure
Trip.com currently commands 45.34% of MakeMyTrip’s total voting rights, which includes 10.7 million ordinary shares alongside 39.67 million Class B Series shares, as detailed in filings with the US Securities and Exchange Commission (SEC).
Background on Trip.com Group
Trip.com, headquartered in Shanghai, is a global OTA listed on both NASDAQ and the Hong Kong Stock Exchange. The company, which is backed by Morgan Stanley, began investing in MakeMyTrip in 2016. Its stake in the company grew significantly to 49% in 2019 through a strategic equity swap with Naspers, which had become a significant stakeholder in MakeMyTrip after the merger with the Ibibo Group.
Over recent years, numerous Indian firms have been progressively reducing Chinese shareholding in response to shifting regulatory and geopolitical circumstances. For example, Paytm reduced Ant Group’s stake from about 25% to a mere 5%. Zomato also orchestrated a complete exit for both Alibaba and Fosun. Similarly, companies like BigBasket, Delhivery, and Pratilipi have facilitated exits for their Chinese investors.
Post-Covid Recovery for MakeMyTrip
Post-Covid, MakeMyTrip has experienced a robust recovery, driven by the rise of revenge travel and increased business mobility. The fiscal year 2025 was marked as its best-performing year, with total revenue soaring by 25% year-on-year to reach $978 million and a solid profit of $95.2 million.
