MakeMyTrip’s India arm has cleared an important regulatory hurdle for its proposed stock market debut. The Securities and Exchange Board of India (SEBI) has given its approval to MakeMyTrip (India), bringing the travel booking company’s Indian business a step closer to becoming a listed entity.
According to a Press Trust of India (PTI) report filed on Monday, the market regulator issued its final observations on November 6 after reviewing the draft offer documents submitted by the company. MakeMyTrip (India) had filed its draft papers in July through the confidential pre-filing route.
While the regulatory approval allows the company to move ahead with its IPO preparations, the issue details and listing timeline are yet to be announced.
Unlike a fresh issue, where a company raises money by issuing new shares, the proposed IPO of MakeMyTrip’s India arm is expected to be an offer for sale (OFS).
This means existing shareholders will sell part of their holdings to public investors. The proposed share sale will be undertaken by Nasdaq-listed MakeMyTrip and its wholly-owned subsidiary, ibibo Group Holdings (Singapore).
As per the PTI report, the proposed transaction will allow the two existing shareholders to sell equity shares in MakeMyTrip (India) Ltd through the public issue.
However, the listing will not result in the Indian business becoming an independent company outside the MakeMyTrip group.
One of the key aspects of the proposed IPO is that MakeMyTrip will continue to retain its subsidiary status even after the listing.
In its regulatory filing with Nasdaq, the parent company said MakeMyTrip (India) would remain its subsidiary following the completion of the proposed IPO.
This also means the Indian entity’s financial performance will continue to be included in the consolidated financial results of MakeMyTrip.
For investors, this distinction is important. The IPO will introduce a separate listed entity in India, but the parent company will continue to consolidate its financial performance.
The proposed listing is expected to serve multiple purposes for the parent company and its Indian subsidiary.
“MakeMyTrip expects the proposed initial public offering and listing of MMT India to enhance its brand visibility and support MMT India’s ability to incentivise and promote talent in a competitive technology recruitment landscape,” the filing stated as per the PTI report.