Ctrip.com, China's largest travel site, is buying a stake in India's largest travel portal MakeMyTrip for $180 million (around Rs 1,200 crore) via convertible bonds, which will allow it to tap into the growing base of Indian consumers who use smartphones to book tickets and holidays.
The company's market capitalisation stood at $687 million after the deal. The deal also allows Ctrip to increase its share in MakeMyTrip up to 26.6 per cent from the open market, which gives the Chinese firm a seat on the Indian firm's board.
MakeMyTrip shares on Nasdaq, was trading at $20.95, up 27.6 per cent at 22.20 hours IST after the firm announced it to the US stock exchange.
The company will focus on further strengthening its share in the Indian online travel market by offering customers the best mobile booking experience across its full service travel products platform, especially as rising smartphone penetration is driving an inflection point in India's online travel opportunity, the firm said i.
"Ctrip is the market leader in the online travel market in China. We believe there are many similarities in the Indian and Chinese online travel markets and we expect this strategic relationship between two market leaders to be mutually beneficial," said Deep Kalra, founder and group chief executive of MakeMyTrip.
Ctrip co-founder and chief executive James Liang said through the transaction, the company has now gained exposure to India's fast growing online travel market.
Morgan Stanley acted as the exclusive financial advisor to MakeMyTrip, while Latham&Watkins LLP served as the legal advisor to MakeMyTrip, the firm said in the statement.