NEW YORK ( TheStreet) -- MakeMyTrip (MMYT - Get Report), India's largest online travel company made a blockbuster debut on Nasdaq, gaining 66% post-listing Thursday. The stock touched a high of $27 in trade on Friday before closing down 5% at $25.12.
The company's market cap zoomed to $800 million within two days, which stood at $450 million at the time of the issue.
The company offered 5 million shares priced at $14 each, thereby raising $70 million. The company also exercised the green shoe option for another 15%, taking the entire issue to $80.5 million. The company plans to use the proceeds from the offering to expand its operations by acquiring strategic businesses, technology enhancement and meeting working capital requirements.
"It's a good sign for Indian companies wanting to raise funds through the U.S. IPO market," Deep Kalra, founder and chief executive officer of MakeMyTrip, told Daily News & Analysis in an interview in New York. "Investors have bought into the India story," he added.The company believes that India's online travel market is under penetrated and will grow faster than the Indian travel industry. According to Internet World Stats, in 2009, Internet penetration was at only 7.0% in India, as compared to over 74.1% in the United States. The company believes that the Indian online travel industry is well-positioned for long-term growth. Moreover, the company forecasts a growth of 7.8% annually over the next 10 years for the Indian travel and tourism industry. Apart from these numbers, the company is betting on the growth in low-cost airlines and rising credit card penetration and secure payment mechanism. During the year ended March 31, 2010, the company reported a 22% year-over-year growth in revenue to $83.6 million, while net loss narrowed to $6.2 million or 35 cents per share from $7.3 million or 55 cents per share a year earlier. The company has never reported a yearly profit. During the quarter ended June 2010, revenue stood at $33.7 million, up 49% year-over-year. Revenue growth was led by a 59.5% increase in revenue from hotels and packages business, while revenue from its air ticketing business grew 49%. On Wednesday, Chinese orthopedic implant maker China Kanghui Holdings (KH) ended its first day of trading on the New York Stock Exchange with gains of 19%. India's top five companies by market cap include, Infosys Technologies (INFY), Wipro (WIT), ICICI Bank (IBN), Tata Motors (TTM) and Cognizant Technology Solutions (CTSH).