MakeMyTrip’s Indian subsidiary has received approval from the Securities and Exchange Board of India (Sebi) to launch an initial public offering. An update on the regulator’s website on Monday confirmed the move.
The Nasdaq-listed online travel platform’s Indian unit, MakeMyTrip (India) Ltd, known as MMT India, had filed draft papers with Sebi in July through the confidential route. After reviewing them, the regulator issued its final observations on 6 November.
Sebi’s observations are an important step in the listing process. They allow the company to continue preparing for its public issue, though it must still meet all applicable regulatory requirements.
Who is selling
The proposed IPO will involve a sale of equity shares in MMT India by its parent, MakeMyTrip, and by ibibo Group Holdings (Singapore) Pte Ltd, a wholly owned subsidiary of the parent. The Gurugram-headquartered company set out these details in a regulatory filing with Nasdaq.
Even after the offering, MMT India will remain a subsidiary of MakeMyTrip. Its financial results will continue to be consolidated with those of the parent.
Why the listing matters to the parent
MakeMyTrip said the public issue and listing should raise MMT India’s brand visibility. It also expects the move to help the unit attract and reward staff in a competitive technology hiring market.
The net proceeds that MakeMyTrip and ibibo Group Holdings receive from selling MMT India shares are expected to strengthen the parent’s cash position. The money will be used for long-term growth, strategic inorganic initiatives, and repurchases of different classes of securities, including convertible securities, by MakeMyTrip.