The travel sector in India is in a churn and today saw the emergence or rather the creation of a leading travel group in India.
The travel sector in India is in a churn and today saw the emergence or rather the creation of a leading travel group in India. The same was announced today when MakeMyTrip and ibibo Group will merge their businesses – the mention of ibibo will be curtailed, if not wiped out entirely. Ibibo is controlled by Naspers, which is a global technology group. The combined entity is expected to offer to the travellers every kind of service and strengthen the booking service for Indian travellers aside from leveraging its huge size to gain market share as well as boost profit.
After the deal is done, the roles of everyone will be further crystalised, but at the moment, Deep Kalra, who is the founder of MakeMyTrip, will stay as Group CEO and Executive Chairman, while Rajesh Magow, who is a co-founder, will remain as CEO India. On the other hand, Ashish Kashyap, who is the founder and CEO of ibibo Group, will become a part of the MakeMyTrip team under the designation of co-founder and President.
Indicating the gain from the transaction for the group, Deep Kalra said, “This deal is expected to create an even more scalable business. I am delighted to be leading such a strong team.”
Morgan Stanley in a note has valued the combined MakeMyTrip and ibibo entity at $1.8 bn today.
Rajesh Magow said, “The combination will help provide an even stronger value proposition to our users.”
Whether there will be exits by employees is not yet clear, but expectations are that everyone will be absorbed in the new entity.
Ashish Kashyap on his part said: “We provide solutions not just for both travellers and suppliers. I am excited that this merger enables us to continue a great journey together.”
Naspers and Tencent have effected the 100% sale of ibibo Group to MakeMyTrip and the later will issue new shares to them. Both these foreign firms have a jointly owned holding company with Tencent share being just 9 percent. However, when the deal is done, Naspers and Tencent will emerge as the largest shareholding entity in MakeMyTrip with a 40% stake.