MakeMyTrip IPO: Nasdaq-listed online travel platform MakeMyTrip has taken the first formal step towards an India listing after its wholly-owned subsidiary, MakeMyTrip (India) Limited, confidentially filed a pre-filed Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The filing has also been made with the BSE and the National Stock Exchange (NSE) for the proposed initial public offering (IPO) of the Indian unit. However, the company has not disclosed the size of the proposed issue.
The development was announced in a regulatory filing submitted to the US Securities and Exchange Commission (SEC) on July 17. The proposed IPO will mark a significant milestone for the country’s largest online travel platform, which has been listed on the Nasdaq since 2011.
The issue is expected to be filed through SEBI’s confidential pre-filing route, a mechanism that allows companies to keep key details such as the issue size, valuation and price band undisclosed until a later stage in the listing process. The route has gained popularity among large issuers as it offers greater flexibility while reducing the pressure associated with public disclosures during the initial stages of an IPO.
Market reports suggest that the proposed public issue will primarily comprise an Offer for Sale (OFS), under which existing shareholders will offload a part of their holdings. Since the shares will be sold by existing investors, the proceeds from the sale are expected to go to the selling shareholders instead of the company. According to reports, Kotak Mahindra Capital, Axis Capital, JPMorgan India and Morgan Stanley India have been appointed as the book-running lead managers for the issue.
What will the India IPO mean for MakeMyTrip?
According to the company, the proposed offering will involve the sale of equity shares in MakeMyTrip (India) Limited by MakeMyTrip Limited and its wholly-owned subsidiary, ibibo Group Holdings (Singapore) Pte. Ltd. Despite the share sale, MakeMyTrip India will continue to remain a subsidiary of the Nasdaq-listed parent company and will continue to be consolidated in its financial statements.
“The proposed initial public offering is expected to involve a sale of equity shares in MMT India by MakeMyTrip and its wholly-owned subsidiary, ibibo Group Holdings (Singapore) Pte. Ltd. Upon completion of the proposed initial public offering, MMT India will continue to be a subsidiary of MakeMyTrip and will be included in MakeMyTrip’s consolidated financial statements,” the company said in its regulatory filing with the US SEC.
The company said it expects the proposed listing in India to improve the visibility of the MakeMyTrip brand in its home market while strengthening its ability to attract, incentivise and retain talent in an increasingly competitive technology hiring environment. It also indicated that the proceeds received by MakeMyTrip and ibibo Group Holdings from the share sale are expected to strengthen the group’s cash position.
According to the filing, the funds received from the proposed sale could be deployed towards long-term business expansion, strategic inorganic growth opportunities and repurchase of different classes of securities, including convertible securities, by MakeMyTrip. The company also said it may explore strategic alternatives over the medium term, subject to regulatory approvals.
The filing further stated that MakeMyTrip and its Indian subsidiary could evaluate options that would allow shareholders to benefit from a security at the MMT India level that is fungible and listed across both the Indian and US capital markets. Such a structure, if pursued and approved by regulators, could potentially provide greater flexibility and wider market access for investors.
(With inputs from agencies)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
