MakeMyTrip to raise $2.5 Bn to halve Chinese investor Trip.com’s stake

Online travel booking (OTA) giant MakeMyTrip is raising over $2.5 billion to enable a partial exit for China-based Trip.com Group, a leading OTA, by facilitating the buyback of previously acquired Class B shares.

MakeMyTrip has announced the launch of a primary offering comprising 1.4 crore equity shares, with the final price yet to be determined, along with convertible notes worth up to $1.25 billion, as per Nasdaq filings.

MakeMyTrip’s stock currently trades at $100.88. As per Entrackr estimates, even if the primary shares are priced at a 10% discount to the current market price, the company could raise approximately $1.27–1.3 billion through the equity issuance alone. Combined with the convertible notes, the total proceeds could facilitate an exit of around $2.5 billion.

According to MMT, the entire proceeds from the primary equity and note offerings will be used to repurchase the portion of Class B shares from Trip.com Group Limited (Trip.com). This appears to be a strategic move by MakeMyTrip to reduce Chinese holding by almost half (over 20%).

Trip.com holds 45.34% of MakeMyTrip’s total voting rights, comprising 10.7 million ordinary shares and 39.67 million Class B Series shares, as per the US Security Exchange Commission (SEC) filings. 

Headquartered in Shanghai, Trip.com is a global online travel agency (OTA) listed on both NASDAQ and the Hong Kong Stock Exchange. The Morgan Stanley-backed company began investing in MakeMyTrip in 2016, but its stake rose significantly to 49% in 2019 through a strategic equity swap with Naspers. Naspers had become a major stakeholder in MakeMyTrip following the merger of the Ibibo Group with the travel platform.

Over the past few years, several Indian companies have steadily reduced Chinese shareholding, in line with evolving regulatory and geopolitical dynamics. Paytm, for instance, brought down Ant Group’s (Alibaba) stake from around 25% to just 5%. Zomato also facilitated a complete exit for both Alibaba and Fosun. Similarly, BigBasket, Delhivery, and Pratilipi have also provided exits to their Chinese investors.

MakeMyTrip saw a strong post-Covid recovery, fuelled by the resurgence of revenge travel and growing business mobility. FY25 emerged as its best-performing year, with total revenue up 25% year-on-year to $978 million and a robust profit of $95.2 million

With the firm firmly entrenched and focused on the Indian market, the move to reduce perceived Chinese ‘influence’ makes sense, despite Trip.com’s obvious strengths in global markets. Those strengths could still be available for MakeMyTrip, considering the significant stake that will remain with the Chinese firm even after this exit. More importantly, MakeMyTrip has the scale and brand to not require too much support from a ‘strategic’ partner, or do it on an arm's length basis. That, in the end, would have been the decisive factor behind the call to cut down the stake from Trip, with very limited downside risk.