Many internet based companies have been planning to go the IPO way since some time now. We had earlier reported that Naukri (Infoedge Ltd.) were one of the first of these companies to actually make an initial public offering in 2006. Then, Shaadi.com and Yatra planned to make initial public offerings by 2007/08, but nothing fell through. Then came Sulekha who were looking forward to making around $30 million through the shares that would be made public around 2009. This was again an idea that was never implemented. MakeMyTrip (MakeMyTrip Ltd.) too had planned to go the IPO way much earlier but now have finally acted on it after a couple of years.
As a result of the tourism in India, many private equity funds are looking to, or already have, invested in many online booking companies, and it is only looking to expand by 30-35%. MakeMyTrip have listed themselves with NASDAQ as opposed to Naukri who sold stocks through NSE and BSE. Stocks will be traded under the symbol ‘MMYT’.
In 2007, MakeMyTrip CEO Deep Kalra had mentioned that they were expecting around Rs.100 crores in commission and so were planning of making the public offering the following year. Now, 2 years on, they are expecting to amass $100 million through the shares on offer, a number which hasn’t been disclosed as yet.
Interestingly, according to Mahesh Murthy‘s tweet, MakeMyTrip has an actual revenue of Rs. 187 crore but have showed Rs. 400 crore on the IPO document by taking gross room rates as compared to the actual ones. You can see this for yourself here. Mr. Murthy tweeted again to reveal that air ticket commissions are 5% for online booking websites. But MakeMyTrip earns a commission of 7.5% from fees and airline-paid incentives.
All said and done, MakeMyTrip only stands to benefit through this IPO. It plans to use proceeds from the IPO for acquisitions and other efforts. With the travel industry booming, we expect more companies to look to follow MMYT, and go the IPO way. What is your take on this?
A lot of numbers don’t seem to make sense. If we were to do a simple calculation air-ticket revenue (1mn txns,avg ticket size 6000, gross thru put Rs.6 bn, revenue at 7.5%) is Rs.46 crore. Similarly for packages, revenue is (37k txns, avg ticket size 20k, gross thru put at Rs.740 mn, revenue at 14%) is Rs.10 crore. So basically, its a total 56 crore revenue unless I am missing something!!