Armed with a new and bulging war chest following its successful debut on NASDAQ last week, MakeMyTrip is on the lookout for “strategic acquisitions to boost our leadership position”, founder and CEO Deep Kalra told WIT.
India’s biggest OTA launched onto NASDAQ last week, with shares closing at 88.93% above its listing price of $14. It closed at $26.45 per share on the day it made its debut. During the day, its share price went up to $26.81, around 91.5% higher above the listing price. It has continued its strong performance throughout the week.
Not only did it herald a momentous moment for the online travel market in India, and Asia, it was also India’s first IPO on NASDAQ in three years, according to the MakeMyTrip blog.
Asked if the success of the IPO exceeded expectations, Deep said, “Based on the overwhelming interest and demand from the roadshows, we were pretty sure the IPO would be successful. This successful of course was a pleasant bonus.”
Calling the future “future bright” for MakeMyTrip, he said the success underscored investors' interest in the booming indian consuming class and the belief that MakeMyTrip’s management would retain the lion share in the market.
Asked if going public would change how the company is operated, Deep said, “More focus on quarterly results, actually sharpens the vision.”
Deep started MakeMyTrip in 2000 from a small office in Okhla, New Delhi. Formerly the vice president for business development for GE Capital Land, Deep saw the potential of how the Internet could lend itself to travel.
He decided at the time that the Indian market wasn’t yet ready for an online travel agency and so he concentrated on the US-India travel sector. In 2005, with the emergence of the low cost carriers, Deep turned his attention to India and launched its website for the Indian travel market in September that year.
In its first year of operation, it became India’s largest e-commerce company. According to MakeMyTrip’s Company Profile, “the company is on track to achieve sales of INR 2500 crores (approximately US$ 500 million) in the financial year ending March 2010, making it India’s largest travel company.”
Its Wikipedia page lists financial Investors as SAIF Partners, Helion Venture Partners, and Sierra Ventures. Independent Members comprise Philip C. Wolf, President and CEO of PhoCusWright Inc.), and Frederic Lalonde, Founder and CEO of Openplaces.org.
On debut day, MakeMyTrip also released information about its performance in the first quarter of this fiscal year (the second quarter of the year), ending June 30 2010.
• The company reported revenue of $33.7 million, up 49.0% over revenue of $22.6 million in the quarter ended June 30, 2009.â�¨
• MMYT reported a profit of $1.3 million for the quarter ended June 30, 2010, from a loss of $(5.6) million in the quarter ended June 30, 2009.
• Revenue from its air ticketing business increased by 27.8% to $10 million in the quarter ended June 30, 2010 from $7.8 million in the quarter ended June 30, 2009, primarily due to a 63.6% growth in gross bookings to $146.5 million in the quarter ended June 30, 2010 from $89.5 million in the quarter ended June 30, 2009. The increase gross bookings was due to a 68.5% increase in the number of transactions by customers.â�¨
• Net revenue margins declined from 7.9% in the quarter ended June 30, 2009 to 6.8% in the quarter ended June 30, 2010. This was due to reduction in service fees MMYT charged on domestic air ticketing business in order to attract more customers.â�¨
• MMYT also pre-purchased $0.9 million in air ticket inventory in the quarter ended June 30, 2009.
• Revenue from hotels and packages business increased by 59.5% to $23.2 million in the quarter, up from $14.6 million in the quarter ended June 30, 2009. This was because of a 74.8% increase in hotels and packages gross bookings to $28.2 million, from $16.1 million for the corresponding quarter last fiscal.â�¨
• Revenue less service costs from MMYT’s hotels and packages business increased by 52.8% to $3.4 million from $2.2 million in the same quarter the previous fiscal. This was due to an increase in gross bookings, partially offset by a reduction in net revenue margins to 11.9% in the quarter ended June 30, 2010, from 13.6% in the corresponding quarter last year. MMYT reduced margins in domestic hotels and packages business offered through its website in order to increase our sales of such packages.
