China-based travel website Ctrip.com has invested $180 million (about Rs 1,200 crore) in Indian online travel company MakeMyTrip.
The investment has been made via five-year convertible bonds on Friday (January 8), will able Ctrip to own about 15-16 per cent in Gurgaon-based MakeMyTrip.com.
"With the investment, we will have a place in the rising online travel market in India," Ctrip.com CEO Liang Jianzhang said.
The partnership will benefit both companies, as there are many similarities between China and India's online tourism, Chinese state-run news agency Xinhua quoted MakeMyTrip CEO Deep Kalra.
According to ET, the Chinese company, which is backed by US travel website Priceline.com, is expected to pick up additional shares of MakeMyTrip in the open market that will see the $12.7 billion travel major own a 26.6 per cent stake in the latter, and assume the position of its largest stakeholder, ahead of SAIF Partners, T Rowe Price, Tiger Global and founder and CEO Deep Kalra
"We are delighted to have Ctrip invest in us. Ctrip is the dominant 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 Kalra in a company-issued statement. Investment banking major Morgan Stanley acted as the sole financial advisor to the transaction.
Founded in 2000, MakeMyTrip is one of the biggest online travel agents in India.
India’s tourism grew by 10 per cent last year whereas online sales rose 16 per cent, according to research company PhocusWright.
Ctrip.com said the move will make it easier for Chinese tourists to visit India. The increasing numbers of Chinese tourists abroad made India and number of countries to woo them with easy visa access.
To welcome Chinese investment in India, government has already extended the e-visa scheme to the Chinese tourists.
BW Reporters
The author is Senior Correspondent with BW Businessworld
