MakeMyTrip sells 1st U.S. IPO by Indian company
By siliconindia   |   Wednesday, 11 August 2010, 20:17 IST   |    2 Comments
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MakeMyTrip sells 1st U.S. IPO by Indian company
Bloomberg: MakeMyTrip, the parent firm of India's largest online travel company, MakeMyTrip India, is selling the first U.S. initial public offering (IPO) by an Indian company in four years at a 26 percent premium to the biggest online travel agencies, reports Lee Spears of the Business Week. Since WNS Holdings raised $255 million in July 2006, MakeMyTrip will be the first IPO by an India-based company in the U.S. Morgan Stanley is the sole book running manager to the offering and Oppenheimer & Co Inc and Pacific Crest Securities LLC will act as co-managers. According to a filing with the Securities and Exchange Commission, the company may raise $70 million from the offering today. As per the data compiled by Bloomberg and Independent International Investment Research, the IPO's midpoint price values the Gurgaon, India- based company at 5.41 times next year's sales, higher than the average of 4.28 for U.S.-traded stocks from Expedia to China's ELong. According to Renaissance Capital LLC, as economic growth in India, surpassing the U.S. by almost three times, attracts investors to MakeMyTrip, the unprofitable reservations provider may face increasing competition from domestic rivals. Five companies have scheduled to price IPOs in the U.S. this week, MakeMyTrip being one of them. According to data compiled by Bloomberg, MakeMyTrip is offering 5 million shares at $12 to $14 each. The data also show that the last seven American companies to complete initial sales sold their shares below the forecast price range, and half of this quarter's U.S. offerings have left buyers with losses. On the other hand, offerings in India gained 20 percent, while shares of companies that completed IPOs in the U.S. have lost 4.9 percent on average this year. This year, 660 billion rupees ($14.2 billion) have been raised by Indian companies. U.S. offerings have raised $76.1 billion this year, which is less than the $139 billion raised in 2007. Last quarter, MakeMyTrip reported net income of $1.3 million, reversing a loss from a year earlier, after increasing sales by 49 percent. The company lost a combined $32.5 million in the prior three fiscal years. MakeMyTrip booked about 48 percent of the $1 billion in online travel reservations made in India last year. Yatra.com and Cleartrip.com accounted for a combined 42 percent of sales. MakeMyTrip.com today has offices in 20 cities across India and 2 international offices in New York and San Francisco, in addition to several franchise locations.

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