MakeMyTrip.com was founded in the year 2000 by Deep Karla, an alumnus of Indian Institute of Management ,Ahmedabad. MMT was launched in the US market to cater the overseas indian community for their US-to-India travel needs. MMT started its Indian operations in september 2005.
On 13 August, 2010 MMT got listed on NASDAQ and went public in the US market.
MMT chairman and CEO Deep Karla's mission statement -"Passion for winning goes beyond merely chasing targets and achieving them. Its the Zest and zeal with which one goes about the achievement. its not only about winning, its about dominating"
Online travel firm MakeMyTrip will acquire rival ibibo in an equity deal that will create one of the leading travel groups in india. In an interview with CNBC-TV18, Deep Karla told ; The objective of the merger is to bring the offline segments of the travel market online. It will be the largest acquisition of MMT since it was founded in 2000.
South Africa's Naspers and china's tencent holdings are selling ibibo group to MakeMyTrip in an exchange for an issuance of new shares by MMT. Upon closing of the transaction, MMT will own 100% of the ibibo group. the transaction is expected to get close by the end of December and is subject to approval by the shareholders. Shares of the loss making company soared by 46% to $29.75 on 18 october, 2016.
Ctrip.com international Ltd. wil have 10% stake in the combined entity as the 5 year convertible notes issued bby MMT to ctrip.com International ltd will also be converted into common equity stock.
The combined entity will bring together a consumer travel brands including MMT, Goibibo, redbus, Ryde, Gostays, Value+ and rightstay together under one group.On Financial and feasibilty Fronts:
The company has been posting quarterly loss in 8 of the last 13 quarters. NASDAQ Critcs say,'MMT is now a dinosaur age internet company and is reasonably expected to perform consistently, if not profitably. Revenues of the company, though are consistently on the rise, Service cost has been increasing year on year. So what explains these losses?
We have been investing to grow hotels and packages business organically by making investments in mobile and marketing as well as in our international hotel business, Says Magow the co-founder.
Airticketing business has suffered a major hit since december 2012 as the kingfisher airlines went down, Domestic airlines lowered commision on OTA, supreme court banned transaction fees, Margins in air ticket got grossly affected. Since the market in the air business were very low, they had to build the hotels and packages business. Currently its H&P segment is contributing to almost 50% revenue.
But the problem was that, the company is not the only player looking at this segment. the biggest acquisition done for Goibibo- Ashish Kashyap, CEO said that, the company is 2.5 times bigger than MMT in terms of volume booking and 5-6 times bigger than Yatra.com
Yatra, a rival OTA had acquired hotels aggregator Travelguru in 2012 to increase their foothead in the H&P space, which again proves that this acqusition could be the profitable for the company as it has moved a step ahead of its rival making it the biggest aqcuistion in travel world
The founders say that the company is heavily investing in the hiring senior talents and technology to make the leap to the next phase. MMT announced that it would be investing in startups in travel tech world. It has embarked on a series of the acquisition since january 2014 including companies Easytobook, HolidayIQ etc. Philosophy behind it is, startups will pick one problem and they will focus on it completely, so their chance of succeeding are simply higher.
Still, Acuisitions have not worked out as the company remains unprofitable and the stock prices has also been collapsing. Company has to fix its operating cost problems. head high on what results will this merger give for the fiscal year ending March 2017.
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