Player Avatar TMFBreakerForce (77.09) Submitted: 9/1/2010 2:36:09 PM : Outperform Start Price: $33.14 MMYT Score: -77.29

Hi Everyone,So I had some time to read through MakeMyTrip's offering prospectus. Below are my notes.* MakeMyTrip just had its IPO on August 12, 2010. The offering price was $14, and shares nearly doubled on the first day of trading. They went all the way to $36 a few days ago. As of this writing, the shares are trading at $28.54.* MakeMyTrip is an online travel company, that provides travel products and solutions in India and the United States. Its products and services include air tickets, hotels, packages, rail tickets, bus tickets, car hire, and ancillary travel requirements, such as travel insurance and visa processing. * They provide access to all major domestic full service and low cost airlines operating in India and all major airlines operating to and from India. Have access to over 4,000 Hotels, Indian Railways, and several major bus operators.* The current market cap based on approx 34.134 million shares outstanding is $974.18 million.* I do not yet see any analysts coverage yet, or guesstimating EPS or revenues.* Received approximately $48.5 million in proceeds from the IPO after fees.* The company states that they will use the IPO proceeds to expand their operations by acquiring or investing in strategic businesses, invest in technology, as well as working capital and general corporate purposes.* MMYT is the second most visited website in India between 2007-2009. 1.7 million unique visitors in 2009. Indian Railways is the number 1 most visited website.* According to Internet World Stats only 7% of the population in India has internet access in 2009 compared to 74.1% in the United States.* According to McKinsey, the Indian middle class is expected to grow 10x in size from 50 million (2005) to 583 million by 2025.* Lists its strengths as: The largest online travel company in India with a well recognized brand, wide range of services and product offering, secure technology platform, customer focused approach, and experienced management team.* Strategy: Company believes that the relatively low but fast growing internet population, coupled with income growth will provide significant growth opportunities. The plan to do this by expanding their hotels and packages business, travel agents network, investing in technology, expanding into new geographic markets, and make selective acquisitions.* Competitors: The company lists,, and, as well as local travel agencies, tour operators, and so forth.* Ownership: as of the IPO, SB Asia Investment Fund II LP owns 43.79% of the outstanding shares.Helion Venture Partners and Tiger Global Private Investment Partners each of 10% of the shares as well.* Financials: The company has yet to turn a profit, but has been steadily cutting its net losses as they inch closer to profitability.Net Income:FY2008: ($18.9 million)FY2009: ($7.3 million)FY2010: ($6.2 million)Revenues:2008: $16.50mln2009: $24.99mln2010: $40.28mln* Transactions:Air Ticketing:2008: 1.029 Million2009: 1.251 Million2010: 1.767 MillionHotels and Packages:2008: 36,9002009: 81,3002010: 109,700* Cash Flows - the company was negative in 2008 and 2009, but did generate $5.231 Million in CFFO for 2010. A step in the right direction.* Seasonality: Revenues and transactions are at their highest in Q1 and Q3 due to holidays.Conclusion:A very interesting company, and certainly has the potential for major growth for many years. Of course, the (hopefully) future growth will be overly dependent on the growing middle class of India as well as the growth of Internet users. The CIA Factbook lists India as the 5th largest economy in world as of July 2009. Indias GDP has averaged more than 7% growth annually since 1997. Their 6.5% GDP growth in 2009 ranked #2 of fastest growing economies in the world with GDP over $150 billion. So it does not seem like wishful thinking in assuming India will not have a growing middle class, but obviously the companys fortunes will be tied to that growth. Lastly, as a brand new public company we have no idea how management will treat shareholders but it will be something to watch as we need to do with all new companies.Looking at the success of other Online travel companies in Motley Fool Land, like Hidden Gems' CTrip (+473% returns and counting since the Dec 2005 Rec), Stock Advisors' (+1,174% returns since David's May, 2004 Rec) maybe Rule Breakers should get a piece of the action? :) I say yes. hehehe.What say you, Fools? Let me know what you think!Best,Matt*All info taken from the company's Offering Prospectus.

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