MakeMyTrip closes $1.44 billion convertible notes offering

NEW YORK/GURUGRAM - MakeMyTrip Ltd (NASDAQ:MMYT), an $11.6 billion market cap online travel company, announced Monday the closing of its $1.25 billion offering of 0.00% convertible senior notes due 2030, with initial purchasers exercising their option to buy an additional $187.5 million in notes. According to InvestingPro data, the company maintains strong financial health with more cash than debt on its balance sheet.

The company also completed its previously announced public offering of 16 million ordinary shares at $90 per share, with underwriters exercising their option to purchase an additional 2.4 million shares.

MakeMyTrip received approximately $1.41 billion in net proceeds from the notes offering after deducting discounts and estimated expenses. The company plans to use proceeds from both offerings to repurchase a portion of its Class B ordinary shares from Trip.com Group Limited.

The notes, which will mature on July 1, 2030, are convertible into ordinary shares at an initial conversion rate of 8.2305 shares per $1,000 principal amount, equivalent to a conversion price of approximately $121.50 per share. This represents a 35% premium above the $90 public offering price of the ordinary shares.

Holders can convert the notes at any time before maturity. MakeMyTrip may redeem the notes under certain conditions after July 10, 2028, if the company’s share price reaches at least 130% of the conversion price for a specified period. Noteholders will have the right to require the company to repurchase their notes on July 3, 2028.

The notes were offered privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and have not been registered under the Securities Act, according to the press release statement.

MakeMyTrip operates travel brands including MakeMyTrip, Goibibo and redBus, offering services such as air ticketing, hotel bookings, holiday planning, and bus ticketing in India and overseas. The company has demonstrated strong operational performance with 25% revenue growth over the last twelve months. For deeper insights into MakeMyTrip’s financials and growth prospects, including 12 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, MakeMyTrip Ltd has announced an upsized public offering, increasing from 14 million to 16 million ordinary shares at $90 each. This move is expected to generate approximately $1.41 billion in net proceeds, potentially reaching $1.62 billion if underwriters exercise their option to purchase additional shares. Simultaneously, the company has priced a $1.25 billion offering of 0.00% convertible senior notes due 2030. The proceeds from these offerings are intended to repurchase a portion of its Class B shares from Trip.com Group Limited under a Share Repurchase Agreement. This transaction could reduce Trip.com’s ownership in MakeMyTrip to less than 20% from over 45%, according to a Citi research note.

Goldman Sachs has maintained its Buy rating on MakeMyTrip with a price target of $126, citing strong growth prospects. They highlight a 28% year-over-year revenue increase in the fourth quarter, with expectations for continued revenue growth exceeding 20%. The company has expressed confidence in its financial strategies and capital allocation plans, particularly in outbound travel, which has been growing faster than domestic travel. Goldman Sachs also noted that MakeMyTrip plans to allocate more free cash flow to stock buybacks and remains open to mergers and acquisitions. Additionally, Citi views the share repurchase as a strategic step towards a potential India IPO, though MakeMyTrip has not immediately planned for this.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.