MakeMyTrip In $171M Share Sale; Founder, PEs Eye Part Exit


  • 26 May 2011

NASDAQ-listed online travel services provider MakeMyTrip Ltd is looking to raise up to $62 million through a fresh public issue of shares while some management executives like founder & CEO Deep Kalra and a few private equity investors, such as Helion Venture and SAIF Partners, are part-selling their stake worth around $109 million (based on last traded market price).

This will mean a combined issue worth around $171 million or nearly Rs 770 crore, including the money coming from over-allotment option for as many as 900,000 shares.

Within one year, MakeMyTrip will see its market value double with the new issue. The company was valued at around $450 million at the IPO and the post-money valuation, after the proposed issue at the current market price, will be around $930 million – making it one of the top 250 most valued Indian firms listed on any stock exchange, according to VCCircle estimates.


In its prospectus filed with the United States’ Securities and Exchange Commission, the firm indicated that the issue could comprise as many as 69 million shares (including over-allotment portion) for a maximum price of $26.22 per share, which may total around $180 million.

The Gurgaon-based firm will sell 16 million fresh shares, in addition to the offer for sale by existing shareholders for 44 million shares. The issue to the extent of 6 million shares (not counting over-allotment portion) has been underwritten by Morgan Stanley & Co. International Plc., Deutsche Bank Securities Inc., Pacific Crest Securities LLC and Oppenheimer & Co. Inc. These four are also managing the issue.

MakeMyTrip intends to use the net proceeds from the offering to expand operations by acquiring or investing in strategic businesses or assets which complement its service and product offerings. It will also invest in technology enhancements, increase working capital and utilise the money for other general corporate purposes. “At this time, we have not entered into any agreement or commitment with respect to any material acquisition or investment,” the company said in its disclosure.


The firm had announced its plans to raise fresh money  but did not share details of the selling shareholders.

MakeMyTrip had floated its IPO last August at a price of $14 per share, raising around $70 million. Of the $70 million offering, about $54 million had been raised through the fresh issue while the rest was secondary sale by investors SAIF Partners, Helion Ventures and Sierra Ventures, besides certain management executives including founder Deep Kalra who part exited.

Helion is said to have an average cost of purchase of around $5 per share as it co-invested in series B and C rounds of funding. SAIF Partners’ cost of purchase is much lower, as it also participated in the first round of funding way back in 2005 when MakeMyTrip was just launching its operations in India. Helion will be making around 5x returns in this second round of part exit while SAIF’s returns will be much higher.


At the last traded price, Kalra will pocket approximately $12.3 million and, thereby, reduce his holding to 9.43 per cent from 11.3 per cent. At the maiden issue, Kalra had pocketed $5.16 million.

Meanwhile, SAIF will encash $75 million while Helion will get $17.5 million in the proposed public issue. SAIF will remain the largest shareholder with over 31 per cent stake, valued at $362 million. It had earlier sold shares worth $5.4 million in the IPO.

Sierra Ventures and Tiger Global are among the shareholders who are not selling shares in this round of public issue.


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