MakeMyTrip to raise $3 billion to cut Chinese stake

BENGALURU: MakeMyTrip has launched a two-part capital raise comprising a public equity offering and a private convertible note issuance, with the combined proceeds to be used for repurchasing a portion of its Class B shares from Trip.com Group, a travel agency headquartered in Shanghai, China.At MakeMyTrip’s last close of $100.88 apiece, the two transactions total to over $3 billion.The planned transactions could reduce Trip.com’s stake in MakeMyTrip from around 45% to about 20%, based on the company’s last closing price of $100.88 and assuming full deployment of proceeds for the repurchase.The Nasdaq-listed online travel firm is offering 14 million ordinary shares in a registered public offering. Underwriters will also have a 13-day option to purchase up to an additional 2.1 million shares. Pricing for the equity offering will be determined at the time of pricing.Separately, MakeMyTrip plans to convert senior notes, set at a principal amount of $1.25 billion, with an option for initial purchasers to buy up to an additional $187.5 million within 13 days of issuance. Terms such as the initial conversion rate and offering price are yet to be finalised.The company intends to deploy all proceeds from both offerings to repurchase part of its Class B shares from Trip.com. The repurchase price will be linked to the equity offering’s net price, adjusted for underwriting discounts and commissions across both transactions. The buyback will be conducted under a share repurchase agreement signed on June 16, 2025.The capital raise follows what the company described as a record financial year. MakeMyTrip reported $9.8 billion in gross booking value for FY25, up nearly 26% year-on-year, with adjusted operating profit rising 35% to $167 million. Growth was driven by both new and repeat customers, with management noting increasing penetration in smaller Indian cities, where tier II and III markets accounted for a growing share of user additions.International travel remains a key expansion area for the platform. In FY25, international air-ticketing revenue rose more than 33%, while international hotel bookings grew over 65%. International business accounted for 25% of MakeMyTrip’s overall revenue, up from 22% a year earlier.The company said it also saw strong growth in non-air verticals. Its accommodation supply expanded to over 89,000 options across 2,000 Indian cities, with a 30% year-on-year increase in hotel inventory from smaller towns. Pilgrimage travel emerged as a significant driver, with volumes in religious tourism hubs rising over 95% year-on-year, aided by demand around large-scale events such as the Mahakumbh in Prayagraj.The company ended the fiscal year with $750 million in cash and equivalents, and deployed $21.5 million towards share buybacks last quarter. MakeMyTrip first raised $180 million from Trip.com, then known as Ctrip, in 2016. In 2019, Trip.com increased its stake in MakeMyTrip to about 49% from 10% through a share-swap transaction, acquiring a 42% stake previously held by South Africa’s Naspers, which had been MakeMyTrip’s largest shareholder. As part of the deal, Trip.com issued shares worth $1.3 billion to Naspers. At the time, the transaction was the largest investment by a Chinese internet company in an Indian firm, surpassing Alibaba Group’s nearly $1.2 billion investment in Paytm and its e-commerce unit Paytm Mall.