The Gurgaon based company is filing in Nasdaq and has stated that Ctrip.com has all the rights to its stock in the open market, combined with shares under the convertible bond, the investor could go up to owning 26.6% of the stakes. According to the deal, Ctrip can appoint a director to the board of the Indian travel company.
Ctrip was launched in 1999 as an online travel company in China, operating in accommodation reservation, transportation ticketing, packaged tours and corporate travel management. The filing stated that it is one of the biggest online transportation ticket seller, in terms of volume. The company went public just after 4 years of its starting, in 2003; has already acquired three companies operating in the same sector in China (Toursforfun, Travelfusion and Suanya).
James Liang, Chairman at Ctrip.com, said, “Today’s announcement marks the beginning of the strategic relationship between Ctrip and MakeMyTrip. Through this transaction, Ctrip has now gained exposure to India’s fast growing online travel market.”
The Indian travel firm reported an average annual revenue growth rate of 24.5% in the past five years. Last year in April it acquired mygola and the year before in 2014 it acquired Easytobook.com for $5 million. Makemytrip had an average of 7.8 million unique visitors in 2015.
The company invested $15 million in HolidayIQ and $3 million in Inspirock last year. Between 2011 and 2014, Makemytrip either bought out or acquired stakes in five companies in India and Southeast Asia.
The market cap of Makemytrip has been fluctuating around $650 million. When it listed itself in Nasdaq in 2010, the company’s valuation went to $800-900 million. After Ctrip‘s investment announcement, MakeMyTrip’s stock jumped around 38% to trade at $22 on Nasdaq.