MakeMyTrip’s Plan to Reduce Chinese Investor’s Stake

MakeMyTrip, a leading online travel company, has announced plans to raise over $2 billion to reduce the stake held by its Chinese investor, Trip.com Group. This move comes after public concerns were raised by EaseMyTrip’s founder, Nishant Pitti, regarding national security and potential compromise of user data.

Background of the Concerns

Nishant Pitti, the founder of EaseMyTrip, expressed concerns that the Chinese-backed board of MakeMyTrip could potentially compromise user data. However, MakeMyTrip dismissed these allegations as baseless, emphasizing its compliance with Indian laws and data privacy standards.

Details of the Plan

The capital will be raised through two main channels: $1.25 billion in convertible senior notes for institutional buyers and a $1.23 billion primary share offering based on current Nasdaq stock prices. MakeMyTrip has already signed a share repurchase agreement with Trip.com, which currently holds a 45.95% stake in the company. Despite reducing its share, Trip.com will remain the largest minority shareholder.

Financial Performance

MakeMyTrip’s revenue rose 25% to $978.3 million in FY25, though net profit fell 56% due to the absence of one-time gains from the previous year. Meanwhile, EaseMyTrip reported nearly flat revenues and a modest 5% rise in net profit. This financial performance indicates a mixed bag for both companies, with MakeMyTrip showing significant revenue growth but a decline in net profit.

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Conclusion

MakeMyTrip’s decision to reduce Trip.com’s stake is a significant development in the online travel industry. The move aims to address public concerns and ensure compliance with Indian laws and data privacy standards. As the company moves forward with its plan to raise over $2 billion, it will be interesting to see how this affects its financial performance and market position. With a commitment to transparency and ethical reporting, we will continue to provide updates on this story and other developments in the industry.