Bracing For New MakeMyTrip Shares (MMYT)

MakeMyTrip Limited (NASDAQ: MMYT) was at one point one of the best IPOs of 2010 after its August 2010 debut.  This was no reverse merger either. The stock had risen to above $40 in September as the excitement around travel in India increased along with the interest in India.  A lot has happened since then and India’s efforts to hike rates to fight inflation have taken out much of the investor interest in the sub-Continent.   Shares are now almost all of the way back down to where they started, and now investors will get to absorb more ADR shares in a stock offering set to price on Thursday evening.

The company is set to sell 1,600,000 ordinary shares and selling shareholders are selling 4,400,000 ordinary shares. Morgan Stanley and Deutsche Bank are the joint book-runners for the 6 million shares being sold, and co-managers are listed as Pacific Crest Securities and Oppenheimer & Co.  MakeMyTrip and its selling holders granted the underwriters an over-allotment option for up to 900,000 ordinary shares.

Just last week, before the announcement of the secondary offering, the shares were trading at $27.12.  Shares were at $25.05 by Monday’s close, and shares are now flirting with $23.50.

What is odd is that this share sale is coming the day before a three-day weekend that many Americans will be treating as a 5-day weekend or even longer.  That throws a wrench into the evaluation of the offering.

Shares are currently down about 4.4% at $23.65 and the trading range since its August IPO has been $20.75 to $42.88.

JON C. OGG