MakeMyTrip To Raise Over $2 Bn To Reduce Chinese Ownership

Weeks after EaseMyTrip (EMT) founder and chairman Nishant Pitti highlighted Chinese ownership in MakeMyTrip, the Nasdaq-listed company has now proposed to raise over $2 Bn to buy back stake from its Chinese investor Trip.com Group Limited. 

The company will raise the capital via senior notes and primary offering:

— It plans to raise $1.25 Bn via convertible senior notes due July 1, 2030, which will be offered to qualified institutional buyers (QIBs). The notes will be convertible into ordinary shares, at the option of the holders, at any time prior to the close of business on the second business day preceding the maturity date. 

— MakeMyTrip said it will raise the remaining amount via issue of 14 Mn primary shares. It said that the offering price for the primary equity offering will be determined at the time of its pricing. Taking the current price of the shares of MakeMyTrip on Nasdaq ($90.32), the company would be raising $1.23 Bn. 

Notably, MakeMyTrip entered into a share repurchase agreement with Trip.com yesterday to repurchase a portion of its Class B ordinary shares in the travel tech company. Post the completion of the proposed repurchase, Trip.com will continue to remain the largest minority shareholder of MakeMyTrip. 

As per Investing.com, Trip.com is currently the largest shareholder of MakeMyTrip (MMT) with a 45.95% stake. Trip acquired a 42.5% stake in the company in 2019.

Citing this Chinese holding, EMT’s Pitti alleged, amid the India-Pakistan conflict last month, that MMT may expose the data of Indian soldiers who use the platform.

“MakeMyTrip may dismiss this as a “motivated accusation” but when national security is at stake, silence is not an option… Half of MakeMyTrip’s board – 5 out of 10 directors have direct ties to China, including pivotal appointments by Trip.com, a company with Chinese ownership,” Pitti said in a post on X on May 16. 

MMT termed the allegations as malicious and motivated, adding that it has stringent corporate governance standards and fully complies with all applicable Indian laws and data privacy frameworks 

It is important to mention that MMT is one of the largest players in the Indian online travel aggregator industry. The company’s revenue surged 25% to $978.3 Mn in FY25 from $782.5 Mn in the previous fiscal year. However, net profit declined 56% YoY to $95.3 Mn, primarily on account of one-time gains it made in FY24. 

Meanwhile, EaseMyTrip’s operating revenue for FY25 remained almost flat at INR 587 Cr (about $68 Mn) and its net profit grew 5% YoY to INR 109 Cr ($12.6 Mn).