MakeMyTrip raises $3.1 billion to slash Chinese firm Trip.com's stake to 20%
Online travel platform MakeMyTrip has raised $3.1 billion through a mix of equity and debt, its banker, Morgan Stanley, said on Friday.
On Tuesday, MakeMyTrip, in a regulatory filing, said that it is raising $3 billion to buy back shares from Trip.com Group, reducing the Chinese company's holding to 20% from the initial 45%.
The fundraise is the largest ever by a listed Indian new-age company.'Primary equity follow-on offering of 18,400,000 ordinary equity shares priced at $90 per share and five-year convertible senior notes offering, at zero percent coupon and 35.0% conversion premium, together represent APAC's largest concurrent offering of equity follow-on and convertible notes since 2022,' said Kamal Yadav, managing director, investment banking, at Morgan Stanley. MakeMyTrip cofounders Deep Kalra and Rajesh Magow currently hold 4.6% of the company's voting rights. Both serve on the board, with Kalra as chairman. The cofounders also retain the right to appoint three independent directors.
Following the buyback, Trip.com's stake in MakeMyTrip has dropped to 19.99% from 45.34%. Its board representation has also been reduced to two directors from five.
The move comes a month after MakeMyTrip faced allegations of endangering the travel data of Indian army personnel due to its Chinese shareholding. Nishant Pitti, founder of rival EaseMyTrip, had alleged that three of the four strategic board committees at MakeMyTrip 'are either led or significantly influenced by directors with clear Chinese affiliations.' MakeMyTrip dismissed the allegations as a 'motivated accusation'.
Trip.com first invested in MakeMyTrip in January 2016 with $180 million in convertible bonds. In 2019, Trip — then known as Ctrip — acquired a 42% stake held by Naspers in a swap deal, receiving a 5.6% stake in Ctrip in exchange.
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