MakeMyTrip (MMYT) CEO Comments on Prospects After IPO Blows Away Expectations
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Certainly demonstrating a sign of strength in the online travel booking services industry, shares of the India-based MakeMyTrip Ltd. (NASDAQ: MMYT) closed today's session up nearly 90 percent from this morning's initial pricing. Today's move sharply higher came even as stocks moved lower across the board.
After pricing 5 million shares at the top of its expected range of $12-$14, the company’s stock closed at $26.45 Thursday, effectively raising about $70 million. MakeMyTrip, based in New Delhi and New York, provides online booking for flights, hotels, bus tickets and rail passes in India.
“We are very excited. I don’t think anyone anticipated this,” Deep Kalra, Founder and CEO of MakeMyTrip told StreetInsider.com on Thursday. “We weren’t really focused on the price as much as focusing on getting the right kind of investors. I am happy to say we have some really nice long-term names take good positions.”
Investors in the U.S. took full advantage of the first Indian company to list on the American stock market since 2007, making the debut the best for an IPO in nearly three years.
“I think that investors are looking for emerging markets where they can actually see large growth,” Kalra said.
The tremendous interest came from MakeMyTrip’s dominance in the Indian travel market, where the growing middle class is traveling more and Internet penetration is growing in the emerging market.
“We are very bullish that the takeoff on Internet (in India) is something that is going to happen,” Kalra added. “More importantly, we expect a lot of the people coming online to be on broadband. We expect to see phenomenal growth as more people get to enjoy the online experience.”
Currently the Internet penetration in India is only about 7 percent among a population of over a billion, making growth prospects bountiful.
Founded in 2000 as a conduit for those in the U.S. to travel to India, Kalra shifted the focus of the company in 2005 to an India-centric travel source. The company saw 1.6 million domestic air ticket transaction in the year ended March 31.
“The company had turned around from an operating cash point of view,” said Kalra. “We had a profitable year in terms of operating profit, close to $1 million last year. We understand we are on the threshold of really taking off. We think that with a couple of strategic initiatives around the M&A side, we will be able to pull away even further and really dominate the market.”
MakeMyTrip does face competition from Indian versions of global travel Web sites such as Expedia (Nasdaq: EXPE) and Travelocity.
“I think the company is in very good position to take advantage of the dynamics in the space. We’ve got good leadership in both airline tickets, as well as hotels and packages,” Kalra said, adding that the latest big addition to the site is its offering of rail tickets. “A lot of India travels by rail and it is doing exceedingly well from a transaction point of view.”
After pricing 5 million shares at the top of its expected range of $12-$14, the company’s stock closed at $26.45 Thursday, effectively raising about $70 million. MakeMyTrip, based in New Delhi and New York, provides online booking for flights, hotels, bus tickets and rail passes in India.
“We are very excited. I don’t think anyone anticipated this,” Deep Kalra, Founder and CEO of MakeMyTrip told StreetInsider.com on Thursday. “We weren’t really focused on the price as much as focusing on getting the right kind of investors. I am happy to say we have some really nice long-term names take good positions.”
Investors in the U.S. took full advantage of the first Indian company to list on the American stock market since 2007, making the debut the best for an IPO in nearly three years.
“I think that investors are looking for emerging markets where they can actually see large growth,” Kalra said.
The tremendous interest came from MakeMyTrip’s dominance in the Indian travel market, where the growing middle class is traveling more and Internet penetration is growing in the emerging market.
“We are very bullish that the takeoff on Internet (in India) is something that is going to happen,” Kalra added. “More importantly, we expect a lot of the people coming online to be on broadband. We expect to see phenomenal growth as more people get to enjoy the online experience.”
Currently the Internet penetration in India is only about 7 percent among a population of over a billion, making growth prospects bountiful.
Founded in 2000 as a conduit for those in the U.S. to travel to India, Kalra shifted the focus of the company in 2005 to an India-centric travel source. The company saw 1.6 million domestic air ticket transaction in the year ended March 31.
“The company had turned around from an operating cash point of view,” said Kalra. “We had a profitable year in terms of operating profit, close to $1 million last year. We understand we are on the threshold of really taking off. We think that with a couple of strategic initiatives around the M&A side, we will be able to pull away even further and really dominate the market.”
MakeMyTrip does face competition from Indian versions of global travel Web sites such as Expedia (Nasdaq: EXPE) and Travelocity.
“I think the company is in very good position to take advantage of the dynamics in the space. We’ve got good leadership in both airline tickets, as well as hotels and packages,” Kalra said, adding that the latest big addition to the site is its offering of rail tickets. “A lot of India travels by rail and it is doing exceedingly well from a transaction point of view.”
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