It’s been an eventful year for India’s largest online travel agent (OTA), MakeMyTrip. For one thing, it isn’t really all that Indian anymore after Chinese travel giant Ctrip, a stakeholder in the company since 2016, acquired a controlling stake in the company  through a share swap with South African conglomerate Naspers in April. While it takes Ctrip’s holding in MMT to 49%, Naspers now owns 5% of Ctrip.

The deal cements Ctrip’s status as the largest OTA in Asia—serving as a bulwark against global competitors like American companies Booking Holdings and Expedia. For MMT, too, the deal has serious upside. Because contrary to its status as India’s premier OTA, MMT has had a rough time of it over the last year.

Despite controlling (along with subsidiaries GoIbibo and RedBus) around 63% of the country’s online travel market, publicly listed MMT has seen little love from investors. This is a far cry from its listing back in 2010. When MMT listed on the NASDAQ, everybody called it a dream debut. Its share price jumped 75% on the day of listing—with the company’s valuation jumping from $480 million pre-listing to $800 million.

Today, MMT’s stock is markedly less appealing. From an all-time high of $40.25 in June 2018, it stood at $24.6 as of 4 December 2019. The NASDAQ Composite index in the same period went up by almost 12%. The company’s results for the quarter ended September 2019, which were announced in November, makes it clear why. While its losses have narrowed, MMT is a long way from turning a profit. Worryingly for the company, lowering losses also came at the expense of growth. While the company’s net loss came down from $28.7 million in the quarter ended June 2019 to $23.6 million in the subsequent quarter, revenue also dropped. From $198.4 million to $181 million during the same period.

That the Indian travel market is expected to reach $48 billion by next year has not been enough to buoy investor sentiment. Nor have forecasts by research firms like Praxis Global Alliance, which predicts that the online travel market in the country will grow at a compound annual growth rate of 16% between 2015 and 2021.

Instead, investors, who have had a ringside view to the cashback and discount-fuelled growth in the space, have their eyes firmly focussed on two things—MMT’s bottom line and growth. Buying growth was expected to stop when MMT acquired Naspers-owned rival GoIbibo in 2016. But in that same period—the year ended March 2017—MMT’s marketing and promotion expenses outpaced net revenue. For the year ended March 2017, MMT’s net revenue stood at $404 million, while it spent as much as $417 million on marketing and promotions that year.

The company understands the prevailing market sentiment and has been more austere in recent years.



Vandana is based in Delhi. She covers vertically focussed startups in consumer internet space and also writes on travel tech and smartphones for The Ken. She has spent 13 years in journalism covering a wide range of subjects- equity markets, mutual funds to education and skilling, working at organisations such as Business Standard, CNBC TV18 and The Week in the past.

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