MakeMyTrip, one of India’s leading online travel companies, has made a dream debut on the US market with its shares soaring over 90 per cent, hours after its listing on leading American stock exchange, NASDAQ.
“It is fair to say it’s been a fairytale listing for us now,” Deep Kalra, CEO of MakeMyTrip, who rang the NASDAQ opening bell on Thursday to begin trading at the exchange, said. “We are very excited. I don’t think anyone anticipated this.”
The company had raised $70 million at an Initial Public Offering (IPO) of 5 million shares to US investors. At an offer price of $14 per share, the company was valued at close to $480 million, prior to the listing. But after the surge in stock price, the valuation has jumped to around $800 million with shares closing at $26.45 on the NASDAQ.
“We are trying not to get carried away with this dream run. More exciting than the pop, as they call it here if an issue is heavily oversubscribed as we were,” he said. “I think, it is a great feeling; it’s a logical milestone at the right point of time.”
Kalra, who founded MakeMyTrip in 2000, said pleased as he was with the market’s reaction, he was focused on using the proceeds to help grow the company. “It’s a good milestone but only the beginning of a long journey,” he said.
“We weren’t really focused on the price as much as focusing on getting the right kind of investors. I am happy to say we have some really nice long-term names take good positions.”
“I think that investors are looking for emerging markets where they can actually see large growth,” said the founder of New Delhi and New York based company which provides online booking for flights, hotels, bus tickets and rail passes in India.
The tremendous interest came from MakeMyTrip’s dominance in the Indian travel market, where the growing middle class is travelling more and Internet penetration is growing in the emerging market.
“We are very bullish that the takeoff on Internet (in India) is something that is going to happen,” Kalra added. “More importantly, we expect a lot of the people coming online to be on broadband. We expect to see phenomenal growth as more people get to enjoy the online experience.”
“We believe that the Indian online travel industry is well-positioned for long-term growth” he said noting currently the internet penetration in India is only about 7 per cent among a population of over a billion as compared with 74.1 per cent in the US.
Founded in 2000 as a conduit for those in the US to travel to India, Kalra shifted the focus of the company in 2005 to an India-centric travel source. The company saw 1.6 million domestic air ticket transaction in the year ended March 31.