Online travel agency MakeMyTrip has raised $180 million in convertible bonds from China’s Ctrip. Ctrip will also be buying MakeMyTrip’s shares from the open market. After converting the bonds to shares and purchase in the open market, Ctrip would effectively own 26.6% of MakeMyTrip’s stock. Upon completion of the investment, Ctrip will acquire the right to appoint a director to the MakeMyTrip board of directors, the company said in a release.
VCCircle points out that Ctrip would become the single largest shareholder in the company ahead of SAIF Partners, T Rowe Price, Tiger Global and company founder and CEO Deep Kalra. “Through this transaction, Ctrip has now gained exposure to India’s fast growing online travel market,”Ctrip CEO and co-founder James Liang said.
For the quarter ended September 30, MakeMyTrip’s losses stood at $12.22 million as compared to $6.9 million in the preceding quarter. However, the net revenues (revenues less service costs), increased 3.6% to $33.2 million from $32.05 million from the same period last year. On a sequential basis, net revenues decreased 12.86% from $36.36 million. Air Ticketing accounted for 54.70% of MakeMyTrip’s net revenues for the quarter, up from 51.97% in the preceding quarter.
In November 2015, MakeMyTrip launched Value+, a brand of budget hotel rooms, on its website. Value+ will offer rooms starting at Rs 1,000 per night, and was thought out because MakeMyTrip’s customers complained about the quality of services provided by budget hotel aggregators (like Oyo Rooms and Zo Rooms).
Similarly, its competitor, Goibibo launched a new section on its website and mobile app called GoStays which aggregates unbranded budget accommodations across India. The platform is live in 72 cities, 862 properties and according to the company this translates to about 10,000 rooms per day for customers to choose from.