Mauritius-based online travel firm MakeMyTrip has infused about $15 million (`100 crore) capital into its India business. The latest fund infusion comes close on the heels of the parent company infusing another Rs 66 crore into its Indian subsidiary last December. According to filings made with the Registrar of Companies (RoC), the India unit raised this fund by allotting 15,88,640 equity shares of Rs 10 each to the holding company at a premium of Rs 615 per share. The fresh fund infusion also comes at a time when it is currently running a massive multi-media advertising campaign involving Bollywood celebrities. The company has of late increased its advertising and marketing spends despite making a huge loss of Rs 351 crore in FY16.
While MakeMyTrip is the main sponsor of the SunRisers Hyderabad team this IPL season, it has also roped in Bollywood stars Alia Bhatt, Ranveer Singh and Diana Penty for its high decibel multi-TVC campaign. Recently, MakeMyTrip launched MMT Assured Hotels – an industry first offering that comes with stay and service guarantee from the company. With this new service, the online travel company categorise and certify hotels based on parameters such as quality of reviews and services provided.
The increased focus on marketing spend is part of its strategy to catch the new online travel market led by proliferation of smartphones and mobile internet in India. While its India business contributes about 85% of its global revenue, the Indian subsidiary MakeMyTrip (India) Private Limited incurred a net loss of `351 crore in FY16, down from the net profit of Rs 5.8 crore recorded in FY15.
The India subsidiary posted the loss despite a surge of 22% in its revenue from operations to Rs 1,919 crore in FY 2016 from Rs 1,573 crore during the period of FY 2015. Expenses also increased sharply from Rs 1,579 crore during the financial year 2015 to Rs 2,276 crore for the financial year 2016. The company is yet to report its annual financial performance for FY17. Apart from catering to hotels packages, air tickets, gift cards, bus tickets, rail tickets, car hire and other ancillary travel requirements, it also facilitate access to travel insurance.
-Sameer Ranjan Bakshi