Tags: US | MakeMyTrip | IPO | Mover

Travel Agency MakeMyTrip Soars in Market Debut

Thursday, 12 August 2010 03:20 PM EDT

Shares of Indian travel agency MakeMyTrip Ltd. soared as much as 80 percent in their market debut on the Nasdaq exchange, even as the broader markets declined.

It could be the best first-day performance for an IPO this year. Financial advisory firm Financial Engines Inc., which so far has posted the top first-day return, closed up nearly 44 percent in its debut in mid-March.

MakeMyTrip Ltd. began as a website in the U.S., mainly serving Indian expats wanting to travel to India. In 2005, it began operations in India, offering airline tickets as well as hotel bookings, bus tickets and other services to the country's fast growing demographic of middle-class consumers. MakeMyTrip cites data from consultancy firm McKinsey saying that the Indian middle class is expected to grow from 50 million people in 2005 to 583 million people in 2025.

India has a much smaller segment of its population on the Internet than the U.S. does, and the company says its revenue will rise as increasingly wealthy Indians get online.

The company's revenue grew throughout the recession. In the year ended March 31, 1.6 million domestic air ticket transactions were booked through MakeMyTrip's website in India, up from 1.2 million in the previous 12 months.

But some analysts expressed surprise at MakeMyTrip's performance Thursday, saying the company has never posted an annual operating profit and faces competition from Indian versions of big travel sites such as Expedia Inc. and Travelocity.

MakeMyTrip plans to use proceeds for acquisitions, new investments in technology and for working capital. The company raised $70 million by pricing 5 million shares for $14 each, the high end of its expected $12-$14 range.

In midday trading, shares gained $10.30, or 74 percent, to $24.30 on the Nasdaq, having risen as high as $25.16 earlier in the session. Another Thursday IPO debut, real estate software company RealPage Inc., also jumped $3.05, or 28 percent, to $14.05.

Meanwhile, broader markets dipped further after big losses on Wednesday, with the Standard & Poor's 500 dropping 0.4 percent.

It's a good sign for companies wanting to raise funds through the IPO market. Many companies have postponed their offerings because of weak demand from investors wary of the stock market, or had to cut the prices on shares steeply to get to market.

RealPage, for example, priced shares at $11 apiece, significantly below expectations. It had hoped shares would fetch $13 to $15 each.

© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


InvestingAnalysis
Shares of Indian travel agency MakeMyTrip Ltd. soared as much as 80 percent in their market debut on the Nasdaq exchange, even as the broader markets declined.It could be the best first-day performance for an IPO this year. Financial advisory firm Financial Engines Inc.,...
US,MakeMyTrip,IPO,Mover
402
2010-20-12
Thursday, 12 August 2010 03:20 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved