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Updated: MakeMyTrip Files For $100 Million IPO On NASDAQ; FY10 Loss At $6.2 Million

Online travel agent MakeMyTrip has filed a preliminary prospectus with NASDAQ for raising $100 million, reports Reuters. MakeMyTrip is the second SAIF Partners funded company in recent times to file for an IPO: One97 Communications filed for a listing in India recentl. MakeMyTrip is reported to be the largest online travel company in India, and has managed to get Morgan Stanley, Oppenheimer & Co and Pacific Crest Securities to underwrite the listing.

MakeMyTrip made a net loss of $6.2 million in FY10, and an operating loss of $6 million. However, according to the company, if one excludes employee share-based compensation costs, it reported a marginal profit of $0.6 million (operating profit of $0.8 million) in the financial year 2009-10. Its total revenue (less service cost)* increased from $16.5 million in FY08 to $40.3 million in FY10. The company has managed to reduce its losses in the last fiscal – in 2009, it had reported an operating loss of $10.6 million, and a net loss of $7.3 million. As of March 31, 2010, MakeMyTrip had 757 employees.

However, there’s no indication of when the company will list, or how many shares will be on sale. When we’d asked MakeMyTrip CEO Deep Kalra of plans for filing an IPO with NASDAQ two months ago, he’s told us that it’s quite some time off…no telling what he meant by that, though.

Notes from the Prospectus (view the Prospectus here)

Air Ticketing Business

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MMYT reports higher revenue from air ticketing in the third and fourth quarter. In FY10, MakeMyTrip recorded 1.6 million transactions for domestic air tickets in India, which resulted in $31.1 million in revenue less service cost from our air ticketing business. MMYT reported transactions of 1.766 million air ticketing transactions in FY10, up from 1.25 million in FY09. Air Ticketing net revenue margins increased to 7.6% in FY10, from 7.2% in FY09.

How margins increased during the downturn: Volatility in global economic conditions and jet fuel prices in recent years caused airlines to cut costs, including reductions in travel agent commissions; some have even eliminated commissions altogether, and travel agents selling air tickets for low-cost airlines do not earn fees from GDSs. MMYT expects this trend to continue, and thus charges service fees, which led to air ticketing net revenue margins increasing from 7.1% in fiscal year 2008 to 7.2% and 7.6% in fiscal years 2009 and 2010, respectively. In addition, the company received incentive fees during the economic slowdown in the second half of FY08 and most of FY09. “In fiscal year 2010, we also secured certain incentive fees from airlines which contributed to the increase in our air ticketing net revenue margins,” according to the prospectus.

Hotels & Packages business

MMYT reports higher revenue from hotels and packages in the second and fourth quarter of the calendar year. Revenue less service cost from Hotels and Packages business totaled $8.0 million in fiscal year 2010 and accounted for 19.8% of total revenue less service cost. MakeMyTrip reported 109,700 hotel and packages transactions for FY10, compared with 81,300 transactions for FY09. Net revenue margins for the segment increased to 14% in FY10, from 10.6% in FY09.

The hotels and packages business tends to yield higher margins than the air ticketing business, which led to an increase in net revenue margins for MakeMyTrip, from 8.9% in FY08 to 10.6% in FY09 and 14.0% in FY10. Transactions have increased from 36,944 transactions in FY08 to 109,672 in FY09. Gross bookings for hotels and packages have increased from $26.5 million in fiscal year 2008 to $57.3 million in fiscal year 2010. However, while the hotels and packages transactions increased by 34.8% in fiscal year 2010 compared with fiscal year 2009, the value of gross bookings for hotels and packages increased at a slower rate during the same period, because more domestic packages were sold in FY10. Revenue less service cost from the hotels and packages business accounted for 14.3%, 22.2% and 19.8% of total revenue less service cost in fiscal years 2008, 2009 and 2010, respectively.

Other Revenue: Bus & Rail Ticketing, Advertisements

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Revenue from other sources increased by 63.8% to $1.2 million in FY10 from $0.7 million in FY09: advertising revenue more than doubled from sales of third-party advertisement space on its websites; $0.2 million in revenue from rail and bus services in FY10, compared to $0.01 million from bus services in FY09.

MMYT began bus ticketing in May 2008, and reported 11,792 bus transactions for the nine months ended March 31, 2009 and 57,529 for FY10.

IP & OKTataByeBye

MMYT owns www.makemytrip.com, www.makemytrip.ae and www.indiaahoy.com, and has applied for trademarks for “Happy Holidays, Happy Prices” and “IndiaAhoy” (their travel agents’ booking platform). The company, which acquired Travis Internet Private Limited (TicketVala), is also in the process of obtaining an assignment over the trademarks “ticketvala.com” and “eBusxpress” for which Travis Internet Private Limited had applied for registration. MediaNama readers might remember that WIPO had granted ownership of MMYTs domain OkTataByeBye.com to Tata Sons. MMYT has appealed against the order at the High Court of Delhi and the United States District Court in the Western District of Washington; both entities have agreed to stay all proceedings in the United States until the Indian proceedings are resolved or terminated, and intend to comply with the Indian court’s ruling.


– Deep Kalra: 14.45%
– SAIF: 51.32%
– Tiger Global: 12.14%
– Helion Ventures: 11.97%
– Sierra Ventures: 7.98%
– Travogue Electronic Travel: 10.04% (Deep Kalra owns 78.4% and Keyur Joshi owns 12.8% in this company)

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While MakeMyTrip intends to use the money raised to expand its hotel suppliers network outside India, expand its packages business and its travel agents network to beyond 4000 travel agents, and the usual ‘strategic acquisitions’ plan, one gets the impressions that also about giving the venture capitalists some kind of an exit. The business has scale, but not significant profitability, and venture capitalists (SAIF, Tiger Global, Helion Ventures, Sierra Ventures) own 83.41% in the company.

*Note: In hotels and packages business, MakeMyTrip’s revenue represents the total amount paid by customers for these services, and the cost of procuring them is classified as service cost. MakeMyTrip evaluates its financial performance based on revenue less service cost, since it reflects more accurately the value addition of the travel services provided by MakeMyTrip (and excludes services provided by hotels etc).

Other Notes from the prospectus

– MakeMyTrip will use the symbol MMYT

– Rupee conversion rate: Rs. 46.41 = $1.00

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– On July 22, 2010, MakeMyTrip effected a 20-for-one share split, due to which, the par value changed from $0.01 per share to $0.0005 per share.

– In FY10, 2.0 million transactions executed through MakeMyTrip accounted for approximately 94.5% of its total transactions.

– In FY 2010, 94.7% of MMYT’s revenue was derived directly from sales by its Indian subsidiary, and 9.1% of its revenue was received in US dollars.

– In fiscal year 2010, transactions executed through MMYTs websites, call centers and travel stores accounted for approximately 94.5%, 3.6% and 1.9%, respectively, of its total transactions, with the remaining portion being executed through its travel agents’ network and mobile service platform.

– MMT India has obtained a license from the Reserve Bank of India to act as a Full Fledged Money Changer, which requires that MMT India maintain a minimum net owned funds of Rs. 2.5 million (approximately $54,000). However, other than money changing services provided to certain of our existing customers, we do not intend to expand our money changing operations.

– PhocusWright founder Philip C. Wolf is a director on MMYTs board. MakeMyTrip.com Inc., this year, entered into an agreement with PhoCusWright, to help the company create a sales and marketing strategy and develop a list of potential customers in the North American market, until June 2011. For this, Ph

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