Online travel aggregator MakeMyTrip has been infused with funds through a rights issue done by its Nasdaq-listed parent, valuing the Gurugram-based company at around $3.8 Bn (INR 26,000 Cr).
The holding company MakeMyTrip Limited Mauritius put in around $18.85 Mn (INR 128 Cr) into MakeMyTrip India over the last six months through subscriptions to the rights issue, according to documents filed by MakeMyTrip India with the Registrar of Companies.
A resolution passed by the board of directors of MakeMyTrip India in February 2018 gave the nod for the allotment of 3,23,649 equity shares at an issue price of $14.74 (INR 1,000) to its holding company MakeMyTrip Limited Mauritius on a rights basis. After the latest allotment, the local unit had issued a total of 26,63,82, 246 fully subscribed shares.
The news of this development comes just two days before MakeMyTrip will report its fourth-quarter results and it will be hoping to improve upon its last quarter results wherein the company reported a jump in losses to $45.3 Mn in versus profit of $16.6 Mn following costs incurred due to the merger with Ibibo Group.
Last month, Ibibo Group secured a fund fusion of $9.83 Mn (INR 65 Cr) in March 2018 from its Singapore-based parent company Ibibo Group Holdings
In its Q3 results of 2018, MakeMyTrip reported an increase in marketing and sales promotion expenses to $109 Mn, a massive 144.6% increase from $44.5 Mn in the quarter ended December 31. 2016.
“Primary drivers of this year on year increase include significant customer inducement and acquisition programs expenses incurred to accelerate growth in our standalone hotel booking business and increases in brand advertisement expenses that were incurred in the quarter ended December 31, 2017 and the consolidation of marketing and sales promotion expenses of the Ibibo Group,” the company has said in a release.
MakeMyTrip has through acquisitions and partnerships aimed at becoming the unchallenged player in the lucrative online travel industry. Last month, it partnered with Flipkart wherein in the ecommerce company will offer travel services of MakeMyTrip, Goibibo, and redBus on its platform.
More details will emerge on Friday when the company reports its financial results.
[The development was first reported by ET.]