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Tag: online travel aggregator

  • MakeMyTrip Sets $3B Share Buyback in Motion, Cutting Ties with Trip.com

    Online travel aggregator (OTA) MakeMyTrip (MMT), which is listed on the Nasdaq, will repurchase shares from its Chinese investor Trip.com Group Limited for around $3 billion.

    Trip.com announced that it has modified its share repurchase arrangement with the Indian travel tech company on June 23 in a filing with the US Securities and Exchange Commission (SEC).

    In accordance with the restated agreement, MMT will purchase the interest for the sum described above. According to the filing, MakeMyTrip will pay roughly $3 billion as consideration for the aforementioned repurchase under the terms of the restated and revised share repurchase agreement that was made between the company and MakeMyTrip.

    Trip.com anticipates that the deal will be finalised by the beginning of July 2025. Following the repurchase agreement, the Chinese company stated that it will continue to own approximately 16.90% of MakeMyTrip’s issued and outstanding shares.

    MMT’s Strong Push to End Ties with the Chinese Firm

    This comes weeks after the OTA, which is listed on the Nasdaq, initially announced that it would raise money through a main offering and senior notes in order to repurchase its interest from Trip.com Group, a Chinese investor.

     MMT then raised $3.1 billion last week to buy back some of its Class B shares from Trip Group. Initially, it was anticipated that MakeMyTrip would offer 14 million main shares as part of the fundraising transaction.

    However, the business later raised this figure to 18.40 million shares at $90. The Chinese investor will remain the largest minority shareholder in the travel tech company based in Gurugram, even after lowering its stake to 16.9%.

    EaseMyTrip Co-founder alleging MMT of Exposing Data

    A month after Nishant Pitti, a cofounder of EaseMyTrip, said that the travel tech business may reveal the information of Indian soldiers who use the platform because of its Chinese ownership, MMT accelerated the buyback agreement.

    MMT, however, denied the accusations and called them “malicious”. The dispute between India and Pakistan following the Pahalgam terrorist assault was the setting for the altercation between the two domestic travel technology giants.

    Notably, Moshe Rafiah, cofounder and CEO; Rajesh Magow, founder and chairman; Deep Kalra; and four Chinese members currently make up MMT’s board.

    Current Financial Dynamics of MMT

    Gains from a tax credit and the valuation of convertible notes propelled MakeMyTrip’s reported profit increase to US $171.9 million in the March 2024 quarter.

    According to MakeMyTrip, the business made US $5.4 million in the same quarter of the prior fiscal year. According to the statement, the fourth-quarter result included a one-time gain of US $30.6 million from the change in the carrying value of the company’s convertible notes due 2028, calculated at amortised cost, and a one-time credit of US $126.1 million from the recognition of deferred-tax assets.

    The gross bookings for the quarter came to US $2,039 million, up from US $1,673.9 million during the same period last year. Compared to a deficit of US $11.2 million in fiscal 2023, a profit of US $216.7 million was made for the entire fiscal year 2024.

  • With the Expansion of the ESOP Pool, Ixigo Grants 17.57 Lakh Stock Options

    With the issuance of 17.57 lakh stock options under ESOP 2024, online travel aggregator (OTA) Ixigo has extended its employee stock option plan (ESOP). The company stated in an exchange filing that the issuance of 17,57,156 options under ESOP 2024 was authorised by its nominating and compensation committee.

    Each option will convert into an equal number of equity shares, and they will vest over a four-year period in equal annual increments of 25% each. At an exercise price of INR 93 per share, the options have been granted.

    The Reason Behind This Move

    Ixigo stated that the goal of the allocation is to retain and reward the finest talent, just like it is for issuing ESOPs. Additionally, the business stated that it wishes to provide current staff with additional pushed prizes.

    The announcement was made just days after Ixigo released its second-quarter FY25 financial results. In the September quarter of 2024, its consolidated net profit fell 51% to INR 13.08 Cr from INR 26.70 Cr in the same quarter the previous year. On a sequential basis, profit decreased from INR 14.85 Cr by 12%.  The main cause of the earnings drop was an increase in total tax costs, which in Q2 FY25 was INR 5.26 Cr.

    Acquiring 51% Stake in Zoop Web Services

    In addition to its financial results, the firm disclosed that it had paid INR 12.54 Cr ($1.4 Mn) for a 51% investment in train food delivery startup Zoop Web Services, which was acquired through a combination of primary and secondary share transactions.

    Several public startups have announced the issuance of stock options under ESOP programmes in recent months. IdeaForge, a drone business, gave its staff more than 2,600 stock options earlier. The supply chain giant Delhivery also gave its workers roughly 73,000 stock options earlier this month.

    Current ESOP Scenario in India

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provides these plans to all employees.

     Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021.

    The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture. Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021.

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