wordpress blog stats
Connect with us

Hi, what are you looking for?

Updated: MakeMyTrip and GoIbibo merge

This post has been updated with inputs from the conference call


MakeMyTrip and GoIbibo are merging, is what appears to be a consolidation of the two largest online travel players in India. In the travel space, the combined entity includes: MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 mm transactions during FY2016.

Financials terms of the transaction

What we know:

  • Following the transaction, Naspers owned Ibibo will be merged into MakeMyTrip, and the Naspers-TenCent combine will become the single largest shareholder in the combined, listed entity, with 40% stake.
  • Chinese OTA Ctrip, which invested $180 million into MakeMyTrip in January 2016, will own around 10% stake in the entity following the merger, after its convertible debentures are converted.
  • The transaction is expected to close by December 2016 and is subject to shareholder and regulatory approvals
  • Naspers will contribute 40% of the working capital: “Ibibo would account for 40% of the cap table, and hence bring in 40% of the net working capital on the balance sheet of Makemytrip by the end of the period. It’s cash plus net working capital. If there’s a shortfall, that difference will be made up by the shareholders of Ibibo.” However, “Final cash infusion is linked to closing, and we’ll be able to share more color on that as we get to closing.”
  • Shareholder approval is apready in: from SAIF Partners and Ctrip
  • The regulatory approval will be from the Competition Commission of India. This will be interesting, because these are effectively the two largest OTA’s in India, especially when it comes to air travel. They’ll have to file for approval with the CCI within 30 days. “We’ll do it well within that time. It takes a month plus to get the go-ahead from CCI, and it could be longer depending upon on whether they have any more queries. That’s why budgeted for end of December for the transaction to close”.
  • Cautious about marketshare disclosures:
    – “Overall marketshare is unlikely to be material when it comes to bus and hotels, and the combined entity will be single digits in terms of marketshare. In case of air, we should be in the 20% mark.”
    – “We’ve had around 16% of the domestic flight market for MakeMyTrip. We haven’t gone down to looking at DGCA data overall and trying to calculate combined share.” (Editor: this last bit is hard to believe)
  • Additional fund-raising? “Difficult to give any color of the combined entity. In the last quarter, we do feel we have enough and more on the balance sheet to be looking at a fund raise at any time in the next one year. We’ll share more color by the end of this calendar year.

What we don’t know:

Separate brands or combined?

Deep Kalra said that “Brands will remain separate, and cater to their loyal audience, in terms of MakeMyTrip, Goibibo and Redbus. On the Internet it is important that you keep brands which have their value, and grow them. In North America and China, when these large scale consolidation and transactions have happened, keeping separate brands have benefited shareholders. We have RightStay and Ryde, and both these spaces are very exciting. There is such a huge growth opportunity in all of the verticals except air ticketing. Almost 50% of domestic air travel is done online, though the international ticketing there is still opportunity. The penetration levels of hotel market branded names is around 15%. If you look at service apartments, villas, BNB’s, that is an infinite market. Inherently, these brands stand for different things in the customers mind. We might look at cross promotion of properties.”

Advertisement. Scroll to continue reading.

“What we have learned and seen around from Ctrip and others. Combining and merging the tech infrastructure is non-trivial. It takes a long time, and some go on for multiple years, and I don’t think we want take on any heroic assumptions there. If you look at supplier facing technology like the extranet, which suppliers use. If we see an extranet which is seeing better usage by suppliers, it is easier to use, we might change things, because it’s just around 40,000 suppliers. But when you look at b2c, you have to tread very carefully (millions of customers). ”

Next Quarter?

“The strategy going forward for the next quarter is that the business will be run as is. I don’t expect any significant changes in terms of the operating cost. MakeMyTrip overall, we’re about to announce our quarterly results. For the past few quarters, Q1 was an improvement was an improvement in terms of the percentage of market spend. We want to keep getting better in terms of marketing efficiency. I don’t see a shift from that strategy.”

Rationalisation of Marketing spends

“It’s only fair to imagine a rationalization in the competitive scenario, since both these brands were leading in the hotels space. You won’t see any dramatic measures out there. We will slow down, but keep a balance between fast growth and at the same time, we’ll look for rationalization. ”

Cross Promotion

Advertisement. Scroll to continue reading.

“Where goibibo has done, is grown affinity in the budget space. Their product releases like Ask, Gocash. We would like to build upon what we have. Bus transactions are very large, and hotels and alternative accommodations through RightStay would be a nice fit. Similarly Ryde for customers from tier 2 and 3 towns to come to airports in major cities. special buses to airports are overpriced, and these are good opportunities.”

Organizational changes

– Founder Deep Kalra will remain Group CEO and Executive Chairman of MakeMyTrip
– Co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip.
– Founder and CEO of ibibo Group, Ashish Kashyap, will join MakeMyTrip’s executive team as a Co-founder and President of the organization.


  • Combined entity:
    • 34.1 million total transactions in FY16
    • 9.7 million air transactions in FY16
    • 6.6 million hotel transactions in FY16
    • 17.5 million bus transactions.
    • 45% transactions on mobile.
    • 4 million total India transactions on mobile
    • 3.2 million total air transactions on mobile
  •  Ibibo:
    • 23.7 million total transactions in FY16
    • Hotel transactions were 3.6 million, a growth of 420% year on year for FY16. 83% of online hotel orders are mobile.
    • Air ticketing transactions were 2.7 million, a growth of 90% year on year. 46% of online flight orders are mobile
    • 17 million bus transactions (60% year on year growth).
    • 24 million app downloads.
  • MakeMyTrip:
    • 27.5 million app downloads
    • 43% of domestic flight orders were mobile
    • 74% of domestic online Hotels Orders were on mobile

– MakeMyTrip’s last announced financials:
makemytrip q1 fy17

– Ibibo data, from Naspers FY16 earnings announcement below


A quick take

Advertisement. Scroll to continue reading.

Remember that Ashish Kashyap had set up Ibibo for Naspers in 2007, and the business went through many segments and business models (social networking, messaging, music streaming, games, payments, grocery and ecommerce marketplaces), before the airline ticketing business in Goibibo finally got traction.

Nearing the 10 year mark of its entry into India, much seems to have changed in the last year: Naspers bought CitrusPay to run PayU. It has effectively dissolved the Goibibo and merged it into MakeMyTrip in exchange for a majority 40% stake. Flipkart, it’s other major investment, has always been a investment, run by its founders.

One wonders about what might happen next to Olx, which is locked in a battle with another classifieds space: Quikr. Is it too unreasonable to think that Naspers might consider merging Olx with Quikr, in exchange for equity? Perhaps it is.

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



A viewpoint on why the regulation of cryptocurrencies and crypto exchnages under 2019's E-Commerce Rules puts it in a 'grey area'


India's IT Rules mandate a GAC to address user 'grievances' , but is re-instatement of content removed by a platform a power it should...


There is a need for reconceptualizing personal, non-personal data and the concept of privacy itself for regulators to effectively protect data


Existing consumer protection regulations are not sufficient to cover the extent of protection that a crypto-investor would require.


The Delhi High Court should quash the government's order to block Tanul Thakur's website in light of the Shreya Singhal verdict by the Supreme...

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ