makemytrip

Online travel agent MakeMyTrip has proposed a fresh sale of 4.5 million ordinary shares on NASDAQ – 3 million of its own and 1.5 million of certain selling shareholders – in a public offering. Its shares closed yesterday at a price of $24.87 (down 3.42% yesterday) and at that price, the offering will be a total $111.9 million.

MakeMyTrip will be offering 3 million ordinary shares (worth $74.6 million at current rates) while certain shareholders will be offering to sell 1.5 million ordinary shares (worth $37.3 million at current rates). It will not receive any proceeds from the sale of shares to be offered by the selling shareholders, so, in effect, is raising $74.6 million for its own use.

The company, at present, has $32.2 million of cash and cash equivalents and $35.2 million in term deposits with various banks, so the need to raise additional funds is unexpected.

It says it plans to use the net proceeds received to expand its operations by acquiring or investing in strategic businesses or assets which complements its service, invest in improving its technology as well as for working capital and other general corporate purposes. The company however notes that it has not entered into any agreement or commitment with regards to any acquisitions or investments.

It has appointed Citigroup, J.P.Morgan and Deutsche Bank Securities as joint book running managers of the offering.

Who Is Selling, And How Much

MakeMyTrip mentions that the selling shareholders and another shareholder (SAIF Partners) have granted the underwriters a 30-day option to purchase an additional 675,000 ordinary shares (worth $16.8 million in current rates). There is also a 45 day lock-up period during which MakeMyTrip, and its selling shareholders and SAIF partners will not sell or transfer any ordinary shares or convertible securities into ordinary shares.

As per MakeMyTrip’s preliminary prospectus:

Sierra Ventures is selling one million shares (1,000,000 shares), following which its stake will come down to 1.23% from 3.99%.

SAIF Partners is not selling any shares, but its shareholding will come down to 28.65% from 31.3%. As mentioned earlier, SAIF may choose to offer ordinary shares in this offering only if the underwriters exercise their option to purchase additional shares.

Tiger Global is not selling any shares, but its shareholding will come down to 17.67% from 19.3%.

– Massachusetts Financial Services Company is not selling any shares, but its shareholding will come down to 4.78% from 5.22%.

T Rowe Price is not selling any shares, but its shareholding will come down to 9.01% from 9.84%.

– Wasatch Advisors Inc is not selling any shares, but its shareholding will come down to 8.46% from 9.24%.

– Management: Founder & Group CEO Deep Kalra is selling 275,000 shares, following which his stake will come down to 8.93%. Co-founder Keyur Joshi is selling 55,000 shares, following which his stake will come down to 0.35%. Co-founder and India CEO Rajesh Magow is selling 100,096 shares, following which his stake will come down to 0.81%.

Chief Business officer (Holidays) Mohit Gupta is selling 20,000 shares, post which his shareholding will come down to 0.07% while Chief Financial Officer Mohit Kabra is selling 7,904 shares. Amit Somani, who resigned as MakeMyTrip’s Chief Products Officer last month is selling 42,000 shares, post which his shareholding will come down to 0.1%.

MakeMyTrip Shareholding

Other Notes from the prospectus

India’s Revenue Contribution: 85.7% of MakeMyTrip’s revenues is from sales by its Indian subsidiary for the fiscal 2013, up from 82.8% in the fiscal year 2012 but down from 92.8% in the fiscal year 2011.

Bookings via website vs call center vs offline stores: In fiscal year 2013, around 94.7% of MakeMytrip’s total transactions were from its websites, while a minor 3.3% transactions were from call centers and 2% were from travel stores. For the nine months ended December 31, 2013, around 93.2% of MakeMytrip’s total transactions were from its websites, while 4.7% transactions were from call centers and 2.1% were from travel stores.

Travel Stores: As of  December 31, 2013, MakeMyTrip had 20 company-owned travel stores in 18 cities, 38 franchisee-owned travel stores in 35 cities which primarily sell packages and counters in four major airports in India.

– Travel Agents’ Network: As of December 31, 2013, MakeMyTrip had a network of around 577 registered agents across 116 cities and towns in India. The company started a travel agents network in 2009 to allow registered agents sell its full suite of online travel products to their customers, although it now offers access only to the company’s hotels and packages products.

MyGuestHouse Stake: As of December 31, 2013, MakeMyTrip owns 38.34% stake in My Guest House. The company had acquired 29% stake My Guest House in November 2011 and plans to acquire 100% stake in the company through an earn out structure based upon the achievement of various business parameters spread over eight years ( i.e. until 2019).

Hotels: As of December 2013, customers can search, compare and make reservations at more than 11,400 hotels and guesthouses in India and more than 144,000 hotels and properties outside India through MakeMyTrip website.

As of December 31, 2013, around 2.5% of hotel suppliers are directly connected to MakeMyTrip, down from 8.6% in April 2013 and 4.7% in April 2012. The decline is due to a larger base of hotels which are yet to be directly connected to MakeMyTrip as of December 31, 2013 and also because it no longer recognizes hotels from My Guest House as being directly connected to MakeMyTrip.

Rail Ticketing: MakeMyTrip has an agreement with IRCTC since 2009 which allows users to book tickets directly from the site. The company has booked a total 0.39 million transactions (387,991 transactions) in the fiscal year 2013, down from 0.84 million transactions (838,429 transactions) in FY 2012 and 0.58 million transactions (576,585 transactions) in FY 2011. For the nine months ended December 31, 2013, it had booked 0.18 million transactions (179,224 transactions).

– Bus Ticketing: MakeMyTrip has agreements with several major Indian and Singapore bus operators which includes aggregators and other intermediaries.The company has booked 0.54 million transactions (543,201 transactions) for the fiscal year 2013, up from 0.31 million transactions (309,726 transactions) in FY 2012 and 0.15 million transactions (147,640 transactions) in FY 2011. For the nine months ended December 31, 2013, it had booked 0.51 million transactions (509,714 transactions).

– Site Metrics: As per comScore, Makemytrip.com had an average of over 8.7 million unique monthly visitors in the nine months ended December 31, 2013 and an average of over 7.2 million unique monthly visitors in fiscal year 2013.

– Mobile: MakeMyTrip has 2 million mobile users as of December 31, 2013. It has registered a cumulative 2.55 million downloads as of February 28, 2014. This includes 1.4 million Android app downloads (launched in April 2012), 0.635 million iPhone app downloads (launched in July 2012), 0.33 million BlackBerry app downloads (launched in early 2011) and 0.185 million Windows Phone app downloads (launched in August 2013).

– UAE Subsidiary: MakeMyTrip expanded its presence in the United Arab Emirates by incorporating a new wholly owned subsidiary MakeMyTrip FZ LLC in the fiscal year 2013. The company had launched its operations in UAE in 2009.

Cashflow: As of December 31, 2013, MakeMyTrip has $32.2 million of cash and cash equivalents and $35.2 million in term deposits with various banks.

Employees: MakeMyTrip had 1,617 employees as of December 31, 2013, of which 1,279 employees are in India, 235 are in Thailand, 78 in Singapore, 11 in Malaysia, five in the US, four in UAE and one in China.

(Updates: this post has been edited for structure, but no information has been added or removed)