Makemytrip.com to offload stake for expansion

Promoters of makemytrip.com, the country's largest online travel company, is planning to raise money for its future business expansion by way of diluting the promoters' stake in favour of an equity investor or by floating its initial public offer (IPO).

"We may float IPO anytime after 2008. We are also open to the option of selling off the promoters' stake once the company reaches a valuation of $100 million," said Deep Kalra, co-promoter and chief executive officer, makemytrip.com.

Currently, the valuation of makemytrip is about $40 million, said Kalra. Promoters of the company own 50 per cent of the equity holding in makemytrip.com.

The balance stake is owned by investment banker Soft Bank, who have invested $10 million in the company so far. Makemytrip doubled its turnover to Rs 200 crore for the year ended March 31, 2006, compared with Rs 98 crore in the previous year.

India, with its enormous tourism potential is becoming a lucrative destination for online travel companies. travelguru and iyatra are other popular travel portals in the country.

Companies like cleartrip, yatraonline and travelocity have already announced their plans of setting up India-specific online companies. Makemytrip would increase its focus on the outbound travel in the country.

"In 2005, India witnessed about 3.85 million international tourists, which is likely to go up to 4.5 million in 2006. Over 5.5 million Indian tourists visited overseas in 2005, which is likely to cross 7 million in 2006," said Kalra.

Makemytrip was started in 1999 by Kalra and his associates. However, it took over four years for the company to really pick up.

"The turnaround came along with the start of low cost airlines, which took the domestic travel trade to new peaks," said Kalra.