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Exclusive: MakeMyTrip Gets INR 73.5 Cr From Mauritius Entity As Virus Pinches OTAs

Exclusive: MakeMyTrip Gets INR 73.5 Cr From Mauritius Entity As Virus Pinches OTAs

MakeMyTrip has raised INR 73.5 Cr in two tranches from Mauritius-based entity

MakeMyTrip‘s share price declined from $29.95 on February 12 to $10.8 on March 18

Founder Deep Kalra and CEO Rajesh Magow have given up salaries for cost-cutting

In the wake of the ongoing slowdown in the aviation and tourism industry, Gurugram-headquartered online travel company MakeMyTrip has raised INR 73.5 Cr in two tranches from Mauritius-based entity — MakeMyTrip Limited.

According to the ministry of corporate affairs (MCA) filings accessed by Inc42, MMT has raised INR 37 Cr on March 16 while the parent company infused INR 36.5 Cr on March 9. As part of the transaction, MakeMyTrip issued 21,81,461 shares to the company at INR 340 per share with a nominal price of INR 10.

Founded in 2000 by Deep Kalra, MakeMyTrip is one of the leading online travel aggregators in India for air ticketing, hotel and alternative accommodation bookings, as well as holiday packages, rail ticketing, bus ticketing, car hire and business travel requirements.

MakeMyTrip had reported an adjusted operating loss of $11.2 Mn in Q3 2020, down from $19.3 Mn in the previous quarter in the same fiscal. Meanwhile, the company’s revenue increased to $146.9 Mn, from $118 Mn in the previous quarter.

While the company might have had the same hopes for this year as well, its operations have been severely affected due to coronavirus. Overall, the travel and tourism industry is facing huge losses right now as people are not travelling amid lockdown.

For MakeMyTrip, the impact is quite visible from the downfall of the share prices. From $29.95 on February 12, MakeMyTrip‘s share price declined to $10.8 on March 18. The situation is quite similar for MakeMyTrip competitor Yatra as well. Yatra’s share price fell from $3.79 on February 14 to $0.91 on March 18.

MakeMyTrip’s Revival Plan

To mitigate the impact of coronavirus on the balance sheets, MakeMyTrip has taken a slew of measures. To start with, MakeMyTrip’s Kalra and CEO Rajesh Magow shared a revival plan with the company’s employees. Some of the measures include reducing variable costs such as advertising, sales promotions and payment gateway costs, along with optimising IT infrastructure and expenses relating to the functioning of our offices and other establishments.

Also, setting an example for other companies and startups as well, both Kalra and Magow are not taking any salaries effective April 2020 while rest of the leadership team have also offered to take approximately 50% in their compensation. With these plans, the company must be trying to resort itself from taking harsh decisions such as layoffs or salary cut of junior or mid-level employees.