Nasdaq-listed MakeMyTrip is moving closer to an India listing after receiving Sebi approval for its subsidiary's initial public offering (IPO). The market regulator issued its final observations on November 6, clearing an important step in the listing process.
MakeMyTrip (India) Ltd (MMT India) had submitted its draft IPO papers to the Securities and Exchange Board of India (Sebi) in July through the confidential filing route. The regulator issued its observations after reviewing the draft documents.
The Sebi approval allows MMT India to move ahead with preparations for its proposed public issue, subject to applicable regulatory requirements.
MakeMyTrip India IPO to Include Stake Sale by Parent
The proposed IPO is expected to comprise an offer for sale (OFS) of equity shares by MakeMyTrip and its wholly-owned subsidiary, ibibo Group Holdings (Singapore) Pte Ltd.
According to a regulatory filing with Nasdaq, the Gurugram-headquartered travel booking company plans to use the listing to strengthen its India business and improve its market presence.
MMT India will continue to remain a subsidiary of MakeMyTrip after the IPO. Its financial results will also continue to be consolidated with those of the parent company.
Key Highlights:
- Sebi issued its final observations on November 6.
- The IPO will involve a stake sale by MakeMyTrip and ibibo Group Holdings.
- MMT India will remain a subsidiary after the proposed listing.
Also Read: The New Financial Risk Isn't the Market. It's Your Social Media Feed
IPO Proceeds to Support MakeMyTrip's Growth Plans
MakeMyTrip expects the proposed IPO and listing to improve MMT India's brand visibility. It also believes the listing will help the subsidiary attract, incentivize, and retain talent in the competitive technology recruitment market.
The parent company and ibibo Group Holdings are expected to receive the net proceeds from their respective share sales. These proceeds will strengthen MakeMyTrip's cash position.
The company plans to use the funds for long-term growth and strategic inorganic initiatives. It may also repurchase different classes of securities, including convertible securities, according to the filing.
The Sebi approval marks a significant development for MakeMyTrip's India business as it prepares for a separate public listing. However, the company has yet to complete the remaining steps required for the IPO.
