103 Udyog Vihar, Phase 1

Gurgaon, Haryana 122016, India

(91-124) 439-5000

 

 

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

MakeMyTrip.com Inc.

60 East 42nd Street

Suite 411

New York, NY 10165

(212) 760 1511

 

 

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

 

 

 

TABLE OF CONTENTS

 

 

 

You should rely only on the information contained in this prospectus. We and the selling shareholders have not authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We and the selling shareholders are not, regardless of the time of delivery of this prospectus or the time of sale of our ordinary shares, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. We and the selling shareholders are offering to sell ordinary shares and seeking offers to buy ordinary shares, only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ordinary shares.

 

We have not taken any action to permit a public offering of the ordinary shares outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of the ordinary shares and the distribution of this prospectus outside of the United States.

 

Until          , 2011 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 

In this prospectus, we refer to information regarding the travel service industry and our competitors from market research reports, analyst reports and other publicly available sources, including from PhoCusWright Inc., or PhoCusWright, an independent travel industry research company founded and controlled by Mr. Philip C. Wolf, one of our directors. See “Related Party Transactions — Transactions with PhoCusWright” for details of our transactions with PhoCusWright. We also refer to data from The Economic Times, a daily business newspaper in India, and the United States Central Intelligence Agency “World Factbook,” or CIA World Factbook.

 

We conduct our business principally through our Indian subsidiary, MakeMyTrip (India) Private Limited, or MMT India. In this prospectus, unless otherwise stated or unless the context otherwise requires, references to “we,” “us,” “our,” “our company” or “our group” are to MakeMyTrip Limited and its subsidiaries collectively, and references to “our holding company” are to MakeMyTrip Limited on a standalone basis.

 

In this prospectus, references to “US,” the “United States” or “USA” are to the United States of America, its territories and its possessions. References to “India” are to the Republic of India, and references to “Mauritius” are to the Republic of Mauritius. References to “$,” “dollars” or “US dollars” are to the legal currency of the United States and references to “Rs.,” “Rupees” or “Indian Rupees” are to the legal currency of India.

 

Solely for the convenience of the reader, this prospectus contains translations of certain Indian Rupee amounts into US dollars at specified rates. Except as otherwise stated in this prospectus, all translations from Indian Rupees to US dollars are based on the noon buying rate of Rs. 45.92 per $1.00 in the City of New York for cable transfers of Indian Rupees, as certified for customs purposes by the Federal Reserve Bank of New York on January 31, 2011. No representation is made that the Indian Rupee amounts referred to in this prospectus could have been or could be converted into US dollars at such rates or any other rates. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding.

 

On July 22, 2010, we effected a 20-for-one share split with respect to all our ordinary and preferred shares, as well as a 20-for-one adjustment with respect to the number of ordinary shares underlying our share options and a corresponding adjustment to the exercise prices of such options. At the same time, the par value of our shares was changed from $0.01 per share to $0.0005 per share. Consequently, all share information and per share data included in this prospectus has been presented on a post-share split basis, unless otherwise specifically stated or the context otherwise requires. In connection with our initial public offering in August 2010, all of our preferred shares were converted into ordinary shares upon the completion of our initial public offering.

 

Unless otherwise indicated, the consolidated financial statements and related notes as of and for the fiscal years ended March 31, 2008, 2009 and 2010, and as of and for the nine months ended December 31, 2009 and 2010, included elsewhere in this prospectus have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. References to a particular “fiscal year” are to our fiscal year ended March 31 of that year. Our fiscal quarters end on June 30, September 30 and December 31. References to a year other than a “fiscal” year are to the calendar year ended December 31.

 

We also refer in various places within this prospectus to “revenue less service cost,” which is a non-IFRS measure that is calculated as revenue less costs for the acquisition of relevant services and products for sale to customers and more fully explained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The presentation of this non-IFRS information is not meant to be considered in isolation or as a substitute for our consolidated financial results prepared in accordance with IFRS as issued by the IASB.

 

PROSPECTUS SUMMARY

	•	the largest online travel company in India with a well-recognized brand;
	•	comprehensive selection of service and product offerings;
	•	broad distribution network;
	•	advanced, secure and scalable technology platform;
	•	customer-focused approach; and
	•	experienced management team.

	•	expand our hotels and packages business;
	•	expand our service and product portfolio to enhance cross-selling opportunities;

	•	expand our travel agents’ network;
	•	enhance our service platforms by investing in technology;
	•	expand into new geographic markets; and
	•	pursue selective strategic partnerships and acquisitions.

Risk Factors

 

Our business is subject to numerous risks and uncertainties that may materially affect our business, financial condition, results of operations and prospects, as more fully described in the section entitled “Risk Factors,” immediately following this prospectus summary. These include:

 

	•	our ability to maintain our existing arrangements with our travel suppliers, the lack of formal agreements with many of our travel suppliers and the ability of many of our suppliers to terminate their arrangements with us at short notice or without notice;
	•	our history of operating losses;
	•	our reliance on third-party systems and service providers, including outsourcing service providers;
	•	our reliance on information technology;
	•	changes in the Indian travel industry, including our ability to effectively compete in this industry;
	•	impediments to the execution and success of our growth strategy; and
	•	our susceptibility to adverse changes in the political, economic and regulatory environment in India that could materially harm our business.

 

Corporate Structure

 

The following diagram illustrates our corporate structure and the place of formation and ownership interest of each of our subsidiaries, as of the date of this prospectus.

 

 

 

Note: (1)		Remaining 0.01% ownership interest held by Deep Kalra, our Group Chairman and Group Chief Executive Officer. See “Business — Regulations” for more information.

 

 

Corporate Information

 

We are a public company limited by shares incorporated in Mauritius. We were incorporated as International Web Travel Private Limited, a private company limited by shares, on April 28, 2000 and subsequently changed our name to MakeMyTrip Limited and converted to a public company on June 23, 2010. Our registered office is located at the offices of Multiconsult Limited at Rogers House, 5 President John Kennedy Street, Port Louis, Mauritius. Our principal executive offices are located at 103 Udyog Vihar, Phase 1, Gurgaon, Haryana 122016, India, and our telephone number at this location is (91-124) 439-5000. Our principal website address is www.makemytrip.com. The information contained on our websites does not form part of this prospectus. Our agent for service of process in the United States is MakeMyTrip.com Inc., located at 60 East 42nd Street, Suite 411, New York, NY 10165.

THE OFFERING

 

Ordinary shares offered:
By us		1,600,000 ordinary shares (1)
By the selling shareholders		4,400,000 ordinary shares (1)
Total		6,000,000 ordinary shares (1)
Ordinary shares outstanding before this offering		34,913,819 ordinary shares
Ordinary shares to be outstanding after this offering		36,573,699 ordinary shares (1)(2)
Offering price		The public offering price is $           per ordinary share.
Over-allotment option		900,000 ordinary shares
Use of proceeds		We will receive net proceeds of approximately $           million from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds received by us from this offering to expand our operations by acquiring or investing in strategic businesses or assets that complement our service and product offerings, to invest in enhancements to our technology, as well as for working capital and other general corporate purposes. At this time, we have not entered into any agreement or commitment with respect to any material acquisitions or investments. See “Use of Proceeds.”
		We will not receive any of the proceeds from the sale of ordinary shares by the selling shareholders.
Lock-up		We, the selling shareholders and Tiger Global Private Investment Partners, or Tiger Global, one of our shareholders, have agreed with the underwriters, with certain exceptions, not to sell or transfer any ordinary shares or securities convertible into or exercisable for ordinary shares for a period of 90 days after the date of this prospectus. See “Underwriting.”
Risk factors		See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ordinary shares.
Payment and settlement		The ordinary shares are expected to be delivered against payment on          , 2011. The ordinary shares will be deposited with a custodian for, and registered in the name of a nominee of, The Depository Trust Company, or DTC, in New York, New York. In general, beneficial interests in the ordinary shares will be shown on, and transfers of those beneficial interests will be effected only through, records maintained by DTC and its direct and indirect participants.
Nasdaq Global Market symbol		MMYT.

Notes: (1)		Unless otherwise specifically stated, the information throughout this prospectus does not take into account the possible issuance of additional ordinary shares to the underwriters pursuant to their option to purchase additional ordinary shares to cover over-allotments.

(2)		The number of ordinary shares outstanding immediately after this offering:

•		is based on 34,913,819 ordinary shares outstanding as of January 31, 2011, assuming the issuance of 59,880 ordinary shares upon the exercise of share options held by certain of our selling shareholders for sale in this offering, effective upon the completion of this offering; and
•		excludes 1,645,537 ordinary shares issuable upon the exercise of share options outstanding as of January 31, 2011 (not taking into account the 59,880 ordinary shares issuable upon the exercise of share options by certain of our selling shareholders for sale in this offering, effective upon the completion of this offering).

		Fiscal Year Ended March 31												Nine Months Ended December 31
		2008				2009				2010				2009				2010
		(in thousands, except per share data and number of shares)
Consolidated Statement of Comprehensive Income (Loss) Data:
Revenue:
Air ticketing		$	14,091.4			$	19,225.1			$	32,119.5			$	23,535.5			$	33,756.5
Hotels and packages			24,189.4				48,622.8				50,287.9				38,056.9				57,704.1
Other revenue			50.1				703.8				1,152.8				845.0				1,883.5
Total revenue			38,330.9				68,551.7				83,560.2				62,437.4				93,344.1
Service cost:
Procurement cost of hotels and packages services			(21,823.8)				(43,069.2)				(42,292.2)				(32,025.7)				(49,335.7)
Purchase of air ticket coupons			(—)				(491.8)				(985.5)				(955.4)				—
Personnel expenses			(8,459.2)				(9,679.8)				(16,562.0)				(13,630.3)				(10,675.2)
Other operating expenses			(23,229.0)				(24,369.9)				(28,160.5)				(19,471.9)				(28,906.2)
Depreciation and amortization			(1,107.5)				(1,558.7)				(1,569.7)				(1,149.7)				(1,399.1)
Results from operating activities			(16,288.7)				(10,617.6)				(6,009.8)				(4,795.7)				3,027.9
Net finance income (costs)			(2,611.2)				3,244.1				(188.8)				(132.8)				(1,885.2)
Profit (Loss) before tax			(18,899.8)				(7,373.5)				(6,198.6)				(4,928.4)				1,142.6
Income tax benefit (expense)			4.5				25.3				(8.4)				(2.8)				—
Profit (Loss) for the period		$	(18,895.4)			$	(7,348.2)			$	(6,207.0)			$	(4,931.3)			$	1,142.6
Earnings (Loss) per ordinary share:
Basic		$	(1.08)			$	(0.42)			$	(0.35)			$	(0.28)			$	0.04
Diluted		$	(1.08)			$	(0.55)			$	(0.35)			$	(0.28)			$	0.04
Weighted average number of ordinary shares outstanding:
Basic			17,437,120				17,437,120				17,521,120				17,514,240				26,137,581
Diluted			17,437,120				20,403,420				17,521,120				17,514,240				27,771,648

		Fiscal Year Ended March 31												Nine Months Ended December 31
		2008				2009				2010				2009				2010
		(in thousands, except per share data and number of shares)
Proforma earnings (loss) per ordinary Share:
Basic (1) (unaudited)		$	(0.59)			$	(0.38)			$	(0.18)			$	(0.15)			$	0.06
Diluted (1) (unaudited)		$	(0.59)			$	(0.38)			$	(0.18)			$	(0.15)			$	0.05
Proforma weighted average number of ordinary shares outstanding:
Basic (1) (unaudited)			26,980,680				29,761,580				29,845,580				29,838,700				26,137,581
Diluted (1) (unaudited)			26,980,680				29,761,580				29,845,580				29,838,700				27,771,648

Note: (1)		In December 2006, August 2007 and May 2008, we issued Series A, Series B and Series C preferred shares, respectively, that were converted into ordinary shares effective upon the completion of our initial public offering on August 17, 2010. Our proforma earnings (loss) per ordinary share (basic and diluted) and proforma weighted average number of ordinary shares outstanding (basic and diluted) have been calculated assuming that the conversion of all our outstanding preferred shares occurred on a “hypothetical basis” on April 1, 2007 for our Series A and Series B preferred shares and April 1, 2008 for our Series C preferred shares. All our preferred shares were converted into ordinary shares effective upon the completion of our initial public offering on August 17, 2010.

	•	as of March 31, 2010 and December 31, 2010 on an actual basis; and
	•	as of December 31, 2010 on an as adjusted basis to reflect (1) the issuance of 59,880 ordinary shares upon the exercise of share options held by certain of our selling shareholders for sale in this offering, effective upon the completion of this offering; and (2) the issuance and sale by us of 1,600,000 ordinary shares offered in this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, and further assuming no exercise by the underwriters of the over-allotment option and no other change to the number of ordinary shares sold by us as set forth on the cover page of this prospectus.

		As of March 31				As of December 31
		2010				2010				2010
		Actual				Actual (1)				As Adjusted
		(in thousands)
Consolidated Statement of Financial Position Data:
Trade and other receivables		$	12,449.5			$	13,286.3			$	13,286.3
Term deposits			14,471.4				17,506.0				17,506.0
Cash and cash equivalents			9,341.5				49,868.9
Total assets			50,633.5				107,508.6
Total equity (deficit) attributable to equity holders of our company			(24,955.4)				72,495.4
Loans and borrowings			40,966.9				210.2				210.2
Trade and other payables			26,467.0				26,524.6				26,524.6
Total liabilities			75,584.5				35,013.2				35,013.2
Total equity (deficit) and liabilities		$	50,633.5			$	107,508.6

Note: (1)		The actual ordinary shares stated in the table above excludes 1,711,412 ordinary shares issuable upon the exercise of outstanding options granted under our equity option plan as of December 31, 2010. As of January 31, 2011, a total of 1,705,417 ordinary shares were issuable upon the exercise of such outstanding options. See “Management — Share Incentive Plans — Equity Option Plan.” The as adjusted ordinary shares as of December 31, 2010 stated in the table above exclude 1,651,532 ordinary shares issuable upon the exercise of outstanding options granted under our equity option plan (not taking into account those share options to be exercised by certain of our selling shareholders for sale in this offering, effective upon the completion of this offering).

Other Data:

 

The following table sets forth for the periods indicated, certain selected consolidated financial and other data:

 

		Fiscal Year Ended March 31												Nine Months Ended December 31
		2008				2009				2010				2009				2010
		(in thousands, except percentages)
Number of transactions:
Air ticketing			1,029.1				1,250.8				1,766.9				1,288.5				1,970.6
Hotels and packages			36.9				81.3				109.7				81.6				124.7
Revenue less service cost (1) :
Air ticketing		$	14,091.4			$	18,733.3			$	31,134.0			$	22,580.1			$	33,756.5
Hotels and packages			2,365.6				5,553.6				7,995.7				6,031.2				8,368.4
Other revenue			50.1				703.8				1,152.8				845.0				1,883.5
		$	16,507.1			$	24,990.7			$	40,282.5			$	29,456.3			$	44,008.4
Gross bookings (2) :
Air ticketing		$	198,799.6			$	260,945.1			$	408,603.1			$	290,713.1			$	468,483.5
Hotels and packages			26,489.7				52,365.7				57,273.1				43,152.0				72,753.6
Net revenue margins (3) :
Air ticketing			7.1%				7.2%				7.6%				7.8%				7.2%
Hotels and packages			8.9%				10.6%				14.0%				14.0%				11.5%

Notes: (1)		As certain parts of our revenue are recognized on a “net” basis and other parts of our revenue are recognized on a “gross” basis, we evaluate our financial performance based on revenue less service cost, which is a non-IFRS measure, as we believe that revenue less service cost reflects more accurately the value addition of the travel services that we provide to our customers. The presentation of this non-IFRS information is not meant to be considered in isolation or as a substitute for our consolidated financial results prepared in accordance with IFRS as issued by the IASB. Our revenue less service cost may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation. The following table reconciles our revenue (an IFRS measure) to revenue less service cost (a non-IFRS measure):

		Air Ticketing												Hotels and Packages												Other Revenue												Total
		Fiscal Year Ended March 31												Fiscal Year Ended March 31												Fiscal Year Ended March 31												Fiscal Year Ended March 31
		2008				2009				2010				2008				2009				2010				2008				2009				2010				2008				2009				2010
		(in thousands)
Revenue		$	14,091.4			$	19,225.1			$	32,119.5			$	24,189.4			$	48,622.8			$	50,287.9			$	50.1			$	703.8			$	1,152.8			$	38,330.9			$	68,551.7			$	83,560.2
Less:
Service cost			—				491.8				985.5				21,823.8				43,069.2				42,292.2				—				—				—				21,823.8				43,561.0				43,277.7
Revenue less service cost		$	14,091.4			$	18,733.3			$	31,134.0			$	2,365.6			$	5,553.6			$	7,995.7			$	50.1			$	703.8			$	1,152.8			$	16,507.1			$	24,990.7			$	40,282.5

		Air Ticketing								Hotels and Packages								Other Revenue								Total
		Nine Months Ended December 31								Nine Months Ended December 31								Nine Months Ended December 31								Nine Months Ended December 31
		2009				2010				2009				2010				2009				2010				2009				2010
		(in thousands)
Revenue		$	23,535.5			$	33,756.5			$	38,056.9			$	57,704.1			$	845.0			$	1,883.5			$	62,437.4			$	93,344.1
Less:
Service cost			955.4				—				32,025.7				49,335.7				—				—				32,981.1				49,335.7
Revenue less service cost		$	22,580.1			$	33,756.5			$	6,031.2			$	8,368.4			$	845.0			$	1,883.5			$	29,456.3			$	44,008.4

(2)		Gross bookings represent the total amount paid by our customers for the travel services and products booked through us, including taxes, fees and other charges, and are net of cancellations and refunds.
(3)		Net revenue margins is defined as revenue less service cost as a percentage of gross bookings.

 

You should carefully consider the risks described below before making an investment decision. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.

 

Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The trading price and value of our ordinary shares could decline due to any of these risks, and you may lose all or part of your investment.

 

This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus.

 

Risks Related to Us and Our Industry

 

If We Are Unable to Maintain Existing, and Establish New, Arrangements with Our Travel Suppliers, Our Business May Be Adversely Affected.

 

Our business is dependent on our ability to maintain our relationships and arrangements with existing suppliers, such as airlines which supply air tickets to us directly, Amadeus (our GDS service provider) and Indian Railways, as well as our ability to establish and maintain relationships with new travel suppliers, including hotels, bus operators and car hire companies. A substantial portion of our revenue less service cost is derived from fees and commissions negotiated with travel suppliers for bookings made through our websites or via our other distribution channels. Adverse changes in existing arrangements, including an inability by any travel supplier to fulfill their payment obligation to us in a timely manner, increasing industry consolidation or our inability to enter into new arrangements with these parties on favorable terms, if at all, could reduce the amount, quality, pricing and breadth of the travel services and products that we are able to offer, which could adversely affect our business and financial performance.

 

No assurance can be given that our agreements or arrangements with our travel suppliers or GDS service provider will continue or that our travel suppliers or GDS service provider will not reduce or eliminate fees or commissions or attempt to charge us for content, terminate our contracts and seek to recover signing bonuses or default on or dispute their payment obligations towards us, any of which could reduce our revenue and net revenue margins or may require us to initiate legal or arbitral proceedings to enforce their contractual payment obligations, which may adversely affect our business and financial performance.

 

We Do Not Have Formal Agreements with Many of Our Travel Suppliers.

 

We rely on various travel suppliers to facilitate the sale of our travel services. We do not have formal agreements with many of our travel suppliers, including low-cost airlines and many hotels whose booking systems or central reservations systems are relied upon by us for bookings and confirmation as well as certain payment gateway arrangements, and there can be no assurance that these third parties will not terminate these arrangements with us at short notice or without notice. Further, where we have entered into formal agreements, many of these agreements are short-term contracts, providing our counterparties with a right to terminate at short notice or without notice. Many of our airline suppliers with whom we have contracts are able to either terminate or alter the terms of their contracts with us at will or by providing a few days’ notice. For example, our agreement with Indian Railways Catering and Tourism Corporation Limited, or IRCTC, which allows us to transact with Indian Railways’ passenger reservation system through the Internet can be terminated by IRCTC without prior notice and at its sole discretion. Termination of any of the abovementioned agreements and/or arrangements could have a material adverse effect on our business, financial condition and results of operations.

 

We Have Sustained Operating Losses in the Past and May Experience Operating Losses in the Future.

 

We sustained operating losses in all our fiscal years through March 31, 2010. While we had operating profit in the nine months ended December 31, 2010, we cannot assure you that we can avoid operating losses in the future. We expect that our operating expenses will increase and the degree of increase in these expenses will be largely based on anticipated organizational growth and revenue trends. As a result, any decrease or delay in generating additional sales volumes and revenue could result in substantial operating losses.

We Rely on Third-Party Systems and Service Providers, and Any Disruption or Adverse Change in Their Businesses Could Have a Material Adverse Effect on Our Business.

 

We currently rely on certain third-party computer systems, service providers and software companies, including the GDS used by full service airlines, and electronic central reservation systems used by low-cost airlines, certain hotels which are directly-connected to us, Indian Railways and bus operators. In particular, we rely on third parties to:

 

 

Any interruption or deterioration in performance of these third-party systems and services could have a material adverse effect on our business. Further, the information provided to us by certain of these third-party systems, such as the central reservations systems of certain of our hotel suppliers, may not always be accurate due to either technical glitches or human error, and we may incur monetary and/or reputational loss as a result.

 

Our success is also dependent on our ability to maintain our relationships with these third-party systems and service providers, including our technology partners. In the event our arrangements with any of these third parties are impaired or terminated, we may not be able to find an alternative source of systems support on a timely basis or on commercially reasonable terms, which could result in significant additional costs or disruptions to our business.

 

We Outsource a Significant Portion of Our Call Center Services and If Our Outsourcing Service Providers Fail to Meet Our Requirements or Face Operational or System Disruptions, Our Business May Be Adversely Affected.

 

We outsource our call center service for sales for all international flights and most of our domestic Indian hotel reservations and packages. We also outsource our call center service for post-sales customer service support for all flights (domestic and international), domestic Indian hotel reservations and packages, and rail and bus ticketing, as well as back office fulfillment and ticketing services, to various third parties in India. If our outsourcing service providers experience difficulty meeting our requirements for quality and customer service standards, our reputation could suffer and our business and prospects could be adversely affected. Our operations and business could also be materially and adversely affected if our outsourcing service providers face any operational or system interruptions.

 

Further, many of our contracts with outsourcing service providers are short-term or have short notice periods. For example, our agreement with Intelenet Global Services, which provides call center services for our Indian domestic air ticketing and international air ticketing business, as well as post-sales customer service support for air tickets, is for a renewable term of three years but may be terminated by either party on two months’ notice. The agreements with iEnergizer IT Services and Motif India Infotech Private Limited, or Motif India Infotech, may be terminated by either party on 90 days’ notice after the first year in the term of such agreements. In the event one or more of our contracts with our outsourcing service providers is terminated on short notice, we may be unable to find alternative outsourcing service providers on commercially reasonable terms, or at all. Further, the quality of the service provided by a new or replacement outsourcing service providers may not meet our requirements, including during the transition and training phase. Hence, termination of any of our contracts with our outsourcing service providers could cause a decline in the quality of our services and disrupt and adversely affect our business, results of operations and financial condition.

 

We Rely on Information Technology to Operate Our Business and Maintain Our Competitiveness, and Any Failure to Adapt to Technological Developments or Industry Trends Could Harm Our Business.

 

We depend on the use of sophisticated information technology and systems, which we have customized in-house, for search and reservation for flights and hotels, as well as payments, refunds, customer relationship management, communications and administration. As our operations grow in both size and scope, we must

continuously improve and upgrade our systems and infrastructure to offer our customers enhanced services, features and functionality, while maintaining the reliability and integrity of our systems and infrastructure in a cost-effective manner. Our future success also depends on our ability to upgrade our services and infrastructure ahead of rapidly evolving consumer demands while continuing to improve the performance, features and reliability of our service in response to competitive offerings.

 

We may not be able to maintain or replace our existing systems or introduce new technologies and systems as quickly as our competitors, in a cost-effective manner or at all. We may also be unable to devote adequate financial resources to develop or acquire new technologies and systems in the future.

 

We may not be able to use new technologies effectively, or we may fail to adapt our websites, transaction processing systems and network infrastructure to consumer requirements or emerging industry standards. If we face material delays in introducing new or enhanced solutions, our customers may forego the use of our services in favor of those of our competitors. Any of these events could have a material adverse effect on our operations.

 

We currently license from third-parties some of the technologies incorporated into our websites. As we continue to introduce new services that incorporate new technologies, we may be required to license additional technology. We cannot be sure that such technology licenses will be available on commercially reasonable terms, if at all.

 

The Travel Industry for India and India-Related Travel Is Intensely Competitive, and We May Not Be Able to Effectively Compete in the Future.

 

The Indian travel market is intensely competitive. Factors affecting our competitive success include, among other things, price, availability and breadth of choice of travel services and products, brand recognition, customer service, fees charged to travelers, ease of use, accessibility and reliability. We currently compete with both established and emerging providers of travel services and products, including other online travel agencies, such as cleartrip.com, expedia.co.in, travelocity.co.in and yatra.com, as well as traditional travel agencies, tour operators, travel suppliers and operators of travel industry reservation databases. Certain of our competitors have also launched websites in other countries to better cater to Indian and other customers located in those areas. For example, cleartrip.com recently launched website operations in the United Arab Emirates. Large, established Internet search engines have also recently launched applications offering travel itineraries in destinations around the world, and meta-search companies who can aggregate travel search results also compete against us for customers. Some of our competitors have significantly greater financial, marketing, personnel and other resources than us and certain of our competitors have a longer history of established businesses and reputations in the Indian travel market (particularly in the hotels and packages business) as compared with us. From time to time we may be required to reduce service fees and net revenue margins in order to compete effectively and maintain or gain market share.

 

Further, we may also face increased competition from new entrants in our industry. We cannot assure you that we will be able to successfully compete against existing or new competitors in our existing lines of business as well as new lines of business into which we may venture. If we are not able to compete effectively, our business and results of operations may be adversely affected.

 

Some travel suppliers are seeking to decrease their reliance on distribution intermediaries such as us by promoting direct distribution channels. Many airlines, hotels, car rental companies and tour operators have call centers and have established their own travel distribution websites. From time to time, travel suppliers offer advantages, such as bonus loyalty awards and lower transaction fees or discounted prices, when their services and products are purchased from supplier-related channels. We also compete with competitors who may offer less content, functionality and marketing reach but at a relatively lower cost to suppliers. If our access to supplier-provided content or features were to be diminished either relative to our competitors or in absolute terms or if we are unable to compete effectively with travel supplier-related channels, our business could be materially and adversely affected.

Some of Our Airline Suppliers (Including Our GDS Service Provider) May Reduce or Eliminate the Commission and Other Fees They Pay to Us for the Sale of Air Tickets, and This Could Adversely Affect Our Business and Results of Operations.

 

In our air ticketing business, we generate revenue through commissions and incentive payments from airline suppliers, service fees charged to our customers and fees from our GDS service provider. Our airline suppliers may reduce or eliminate the commissions and incentive payments they pay to us. To the extent any of our airline suppliers reduce or eliminate the commissions or incentive payments they pay to us, our revenue may be reduced unless we are able to adequately mitigate such reduction by increasing the service fee we charge to our customers in a sustainable manner. However, any increase in service fees may also result in a loss of potential customers. Further, our arrangement with the airlines that supply air tickets to us may limit the amount of service fee that we are able to charge our customers. Our business would also be negatively impacted if competition or regulation in the Indian travel industry causes us to have to reduce or eliminate our service fees.

 

We Rely on the Value of Our Brand, and Any Failure to Maintain or Enhance Consumer Awareness of Our Brand Could Have a Material Adverse Effect on Our Business, Financial Condition and Results of Operations.

 

We believe continued investment in our brand, “MakeMyTrip,” is critical to retain and expand our business. We believe that our brand is well respected and recognized in the Indian travel market, particularly in the air ticketing segment. However, we are relatively new in the hotels and packages segment, and may not enjoy the same brand recognition in this business. We have invested in developing and promoting our brand since our inception and expect to continue to spend on maintaining our brand’s value to enable us to compete against increased spending by our competitors, as well as against emerging competitors, including search engines and meta-search engines, and to allow us to expand into new geographies and products where our brand is not well known. Our marketing costs may also increase as a result of inflation in media pricing (including search engine keywords). There is no assurance that we will be able to successfully maintain or enhance consumer awareness of our brand. Even if we are successful in our branding efforts, such efforts may not be cost-effective. If we are unable to maintain or enhance consumer awareness of our brand and generate demand in a cost-effective manner, it would negatively impact our ability to compete in the travel industry and would have a material adverse effect on our business. See also “— We Cannot Be Sure That Our Intellectual Property Is Protected from Copying or Use by Others, Including Current or Potential Competitors.”

 

We May Not Be Successful in Implementing Our Growth Strategies.

 

Our growth strategy involves expanding our hotels and packages business, travel agents’ network and our service offerings. Further, one of our strategies is to enhance our service platforms by investing in technology, and expanding into new geographic markets. Our success in implementing our growth strategies are affected by:

 

 

Many of these factors are beyond our control and there can be no assurance that we will succeed in implementing our strategy. Separately, our growth strategy also involves expanding into new geographic markets

which will involve additional risks. See “— Our International Operations, Some of Which Are New to Us, Involve Additional Risks.”

 

We May Not Be Successful in Pursuing Strategic Partnerships and Acquisitions, and Future Partnerships and Acquisitions May Not Bring Us Anticipated Benefits.

 

Part of our growth strategy is the pursuit of strategic partnerships and acquisitions. There can be no assurance that we will succeed in implementing this strategy as it is subject to many factors which are beyond our control, including our ability to identify, attract and successfully execute suitable acquisition opportunities and partnerships. This strategy may also subject us to uncertainties and risks, including acquisition and financing costs, potential ongoing and unforeseen or hidden liabilities, diversion of management resources and cost of integrating acquired businesses. We could face difficulties integrating the technology of acquired businesses with our existing technology, and employees of the acquired business into various departments and ranks in our company, and it could take substantial time and effort to integrate the business processes being used in the acquired businesses with our existing business processes. Moreover, there is no assurance that such partnerships or acquisitions will achieve our intended objectives or enhance our revenue.

 

In March 2010, we acquired certain assets of Travis Internet Private Limited, an online bus ticketing company, including the website www.ticketvala.com, which gives us the ability to provide our bus suppliers with access to a real time bus reservations technology platform. We intend to leverage this platform to enable more bus operators to be directly-connected to our booking system with such technology, but there is no assurance that we will be able to successfully leverage this new platform to further expand our bus offering.

 

In February 2011, we entered into a share purchase agreement to acquire Luxury Tours & Travel Pte Ltd, a Singapore-based travel agency, engaged in the business of providing hotel reservations, excursion tours and other related services to inbound and outbound travelers in Singapore and the rest of Southeast Asia. The acquisition is subject to various closing conditions. We intend to leverage this acquisition to build a position of strength in Southeast Asia through relationships with local hotels and vendors, but there is no assurance that we will be able to successfully leverage this acquisition to further grow our business in the region.

 

Our Arrangements with Some of Our Suppliers May Subject Us to Additional Monetary Risks.

 

We generally do not assume inventory risk in our air ticketing business as we typically act as an agent. However, on a few occasions, we pre-purchase air ticket inventory in order to enjoy special negotiated rates and we assume inventory risk on such tickets. If we are unable to sell these tickets as anticipated either at all, or at expected rates, our revenue and business may be adversely affected. We also generally do not guarantee a minimum number of room reservations to our hotel suppliers. However, in a few instances, particularly when we anticipate high volumes of room reservations, we may enter into arrangements with one or more of our hotel suppliers where we guarantee a minimum number of room reservations through us at an agreed rate, in order to obtain favorable terms or discounts. We may use this “guaranteed” model increasingly for future transactions with hotels as our business expands. Although we have generally been able to obtain extensions from our hotel suppliers where we have been unable to sell our minimum guaranteed number of rooms, there can be no assurance that we will be able to obtain similar extensions in the future. Such guarantees may result in losses to us if we are unable to fulfill our commitment to the hotels or if we are unable to obtain similar extensions.

 

Certain of Our Businesses or Services Have Only Recently Been Introduced and, As a Result, It May Be Difficult to Evaluate Their Performance and Prospects.

 

Some of the services and products offered by us were introduced recently. For example, we started our bus ticketing business in May 2008 and our rail ticketing business in June 2009. As a result, these businesses have a limited operating history and it may be difficult to evaluate their performance and prospects.

 

Our International Operations, Some of Which Are New to Us, Involve Additional Risks.

 

We have been operating in the United States since 2000, servicing mainly the air ticketing needs of non-resident Indians in the United States traveling inbound to India. We also launched our website in the United Arab Emirates in December 2009 and launched our website in Canada in July 2010, following, among other things, the registration of our websites’ domain names (www.makemytrip.ae and www.makemytrip.ca) with the relevant

registry as well as the procurement of additional servers to handle the increased traffic from these international websites. Our website in Canada is currently owned by a company which we have registered in Canada. We intend to transfer legal ownership of this company to us by September 2011. We need to continue to tailor our services and business model to the unique circumstances of such markets to succeed, including building new supplier relationships and customer preferences. We also intend to expand our business in other markets, particularly those with a significant non-resident Indian population as well as those with proximity to India or favored by Indian travelers. For example, in February 2011, we entered into a share purchase agreement to acquire Luxury Tours & Travel Pte Ltd, a Singapore-based travel agency. Adapting our practices and models effectively to the supplier and customer preferences of new markets could be difficult and costly and could divert management and personnel resources. We could also face additional regulatory requirements in our new markets which could be onerous. We cannot assure you that we will be able to efficiently or effectively manage the growth of our operations in these new markets.

 

In addition, we are subject to additional risks in our new international operations that may not exist in our Indian operations, including:

 

 

If we are not able to effectively mitigate or eliminate these risks, our results of operations could be adversely affected.

 

Our Business Could Be Negatively Affected by Changes in Search Engine Logic.

 

We utilize Internet search engines such as Google ^tm and Yahoo! ^tm India, including through the purchase of travel-related keywords, to drive traffic to our websites. These search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or optimal placement of links to our websites may be negatively affected. In addition, a significant amount of our business is directed to our websites through pay-per-click and display advertising campaigns on the Internet and search engines whose pricing and operating dynamics can rapidly change, both technically and competitively. If major search engines such as Google ^tm or Yahoo! ^tm India, which we utilize for a significant amount of our search engine traffic, change the logic used on their websites for search results in a manner that negatively affects the search engine ranking, paid or unpaid, of our websites or those of our third-party distribution partners, we may experience a decline in traffic on our websites and our business may be adversely affected.

 

System Interruption in Our Information Systems and Infrastructure May Harm Our Business.

 

We rely significantly on computer systems to facilitate and process transactions. We may in the future experience system interruptions that make some or all of these systems unavailable or prevent us from efficiently fulfilling bookings or providing services to our customers. Any interruptions, outages or delays in our systems, or deterioration in their performance, could impair our ability to process transactions and decrease the quality of our service to our customers. If we were to experience frequent or persistent system failures, our reputation and brand could be harmed.

 

While we have backup systems and contingency plans for critical aspects of our operations or business processes, certain other non-critical systems are not fully redundant and our disaster recovery or business continuity planning may not be sufficient. Fires, floods, power outages, telecommunications failures, earthquakes, acts of war or terrorism, acts of God, computer viruses, sabotage, break-ins and electronic intrusion attempts from both external and internal sources and similar events or disruptions may damage, impact or interrupt our computer or

communications systems, business processes or infrastructure at any time. Although we have put measures in place to protect certain portions of our facilities and assets, any of these events could cause system interruptions, delays and loss of critical data, and could prevent us from providing services to our customers and/or suppliers for a significant period of time. We do not carry business interruption insurance for such eventualities. Remediation may be costly and we may not have adequate insurance to cover such costs. Moreover, the costs of enhancing infrastructure to attain improved stability and redundancy may be time consuming and expensive and may require resources and expertise that are difficult to obtain.

 

We Are Exposed to Risks Associated with Online Security and Credit Card Fraud.

 

The secure transmission of confidential information over the Internet is essential in maintaining customer and supplier confidence in us. Security breaches, whether instigated internally or externally on our system or other Internet-based systems, could significantly harm our business. We currently require customers to guarantee their transactions with their credit cards online. We rely on licensed encryption and authentication technology to effect secure transmission of confidential customer information, including credit card numbers, over the Internet. However, advances in technology or other developments could result in a compromise or breach of the technology that we use to protect customer and transaction data. We incur substantial expense to protect against and remedy security breaches and their consequences. However, our security measures may not prevent security breaches and we may be unsuccessful in or incur additional costs by implementing our remediation plan to address these potential exposures.

 

We also have agreements with banks and certain companies that process customer credit card transactions for the facilitation of customer bookings of travel services from our travel suppliers. The online payment gateway for certain of our sales made through our mobile platform or through international credit cards is not secured by “Verified by VISA” or “MasterSecure,” and we may be liable for accepting fraudulent credit cards on our websites. We may also be subject to other payment disputes with our customers for such sales. If we are unable to combat the use of fraudulent credit cards, our revenue from such sales would be susceptible to demands from the relevant banks and credit card processing companies, and our results of operations and financial condition could be adversely affected.

 

Declines or Disruptions in the Travel Industry Could Adversely Affect Our Business and Financial Performance.

 

Our business and financial performance are affected by the health of the Indian as well as worldwide travel industry, including changes in supply and pricing. Events specific to the travel industry that could negatively affect our business include continued fare increases, travel-related strikes or labor unrest, fuel price volatility and bankruptcies or liquidations of our suppliers. Recent events in the Middle East have resulted in an adverse impact on travel to that region. Such events have also contributed to an increase in crude oil prices which may have an adverse impact on the travel industry globally, including our business.

 

Additionally, our business is sensitive to safety concerns, and thus our business has in the past declined and may in the future decline after incidents of actual or threatened terrorism, during periods of political instability or conflict or during other periods in which travelers become concerned about safety issues, including as a result of natural disasters such as tsunamis or earthquakes or when travel might involve health-related risks, such as the Influenza, H1N1 virus, avian flu and Severe Acute Respiratory Syndrome, or other epidemics or pandemics. Such concerns are outside our control and could result in a significant decrease in demand for our travel services. Any such decrease in demand, depending on its scope and duration, together with any other issues affecting travel safety, could significantly and adversely affect our business and financial performance over the short and long term. The occurrence of such events could result in disruptions to our customers’ travel plans and we may incur additional costs and constrained liquidity if we provide relief to affected customers by not charging cancellation fees or by refunding the cost of airline tickets, hotel reservations and other travel services and products. If there is a prolonged substantial decrease in travel volumes, particularly air travel and hotel stays, for these or any other reasons, our business, financial condition and results of operations would be adversely affected.

Our Business and Results of Operations Could Be Adversely Affected by Global Economic Conditions.

 

Consumer purchases of discretionary items generally decline during recessionary periods and other periods in which disposable income is adversely affected. As a substantial portion of travel expenditure, for both business and leisure, is discretionary, the travel industry tends to experience weak or reduced demand during economic downturns.

 

Unfavorable changes in the above factors or in other business and economic conditions affecting our customers could result in fewer reservations made through our websites and/or lower our net revenue margins, and have a material adverse effect on our financial condition and results of operations.

 

In the second half of calendar year 2008 and the first half of calendar year 2009, there was a rapid deterioration of global economic conditions, including economic conditions in India, which impacted our business. The current economic environment continues to be uncertain. The weakness and uncertainty in the economy has negatively impacted both corporate and consumer spending patterns and demand for travel services in general.

 

As an intermediary in the travel industry, a significant portion of our revenue is affected by fares and tariffs charged by our suppliers as well as volumes of sales made by us. During periods of poor economic conditions, airlines and hotels tend to reduce rates or offer discounted sales to stimulate demand, thereby reducing our commission-based income. A slowdown in economic conditions may also result in a decrease in transaction volumes and adversely affect our revenue. It is difficult to predict the effects of the uncertainty in global economic conditions. If economic conditions worsen globally or in India, our growth plans, business, financial condition and results of operations could be adversely impacted.

 

Our Processing, Storage, Use and Disclosure of Customer Data of Our Customers or Visitors to Our Website Could Give Rise to Liabilities As a Result of Governmental Regulation, Conflicting Legal Requirements, Differing Views of Personal Privacy Rights or Data Security Breaches.

 

In the processing of our customer transactions, we receive and store a large volume of customer information. Such information is increasingly subject to legislation and regulations in various jurisdictions and governments are increasingly acting to protect the privacy and security of personal information that is collected, processed and transmitted in or from the governing jurisdiction. We could be adversely affected if legislation or regulations are expanded or amended to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations. As privacy and data protection become more sensitive issues in India, we may also become exposed to potential liabilities. For example, under the Information Technology Act, 2000, as amended, we are subject to civil liability for wrongful loss or gain arising from any negligence by us in implementing and maintaining reasonable security practices and procedures with respect to sensitive personal data or information on our computer systems, networks, databases and software.

 

We cannot guarantee that our security measures will prevent data breaches. Companies that handle such information have also been subject to investigations, lawsuits and adverse publicity due to allegedly improper disclosure of personally identifiable information. Security breaches could damage our reputation, cause interruptions in our operations, expose us to a risk of loss or litigation and possible liability, and could also cause customers and potential customers to lose confidence in the security of our transactions, which would have a negative effect on the demand for our services and products. Moreover, public perception concerning security and privacy on the Internet could adversely affect customers’ willingness to use our websites. A publicized breach of security in India or in other countries in which we have operations, even if it only affects other companies conducting business over the Internet, could inhibit the growth of the Internet as a means of conducting commercial transactions, and, therefore, the prospects of our business.

 

These and other privacy and security developments that are difficult to anticipate could adversely affect our business, financial condition and results of operations.

We Cannot Be Sure That Our Intellectual Property Is Protected from Copying or Use by Others, Including Current or Potential Competitors.

 

Our websites rely on content and in-house customizations and enhancements of third-party technology, much of which is not subject to intellectual property protection. We protect our logo, brand name, websites’ domain names and, to a more limited extent, our content by relying on trademarks, trade secret laws and confidentiality agreements. Even with all of these precautions, it is possible for someone else to copy or otherwise obtain and use our content, techniques and technology without our authorization or to develop similar technology. Effective trademark, copyright and trade secret protection may not be available in every country in which we operate, offline or through the Internet, and policing unauthorized use of our content and technological customizations is difficult and expensive. Our logo and brand name, “MakeMyTrip,” are only registered as trademarks in India and the United States and are not protected in other countries where we operate or otherwise, and we are in the process of applying to obtain copyright protection for our logo and brand name in India. We cannot be sure that our trademarks or domain names will be protected to the same extent in India or elsewhere as in the United States or that the steps we have taken will prevent misappropriation or infringement of what we consider our proprietary information. Such misappropriation or infringement could have a material adverse effect on our business. In the future, we may need to engage in litigation to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. Such litigation might result in substantial costs and diversion of resources and management attention.

 

Our Business Experiences Seasonal Fluctuations and Quarter-to-Quarter Comparisons of Our Results May Not Be Meaningful.

 

Our business experiences seasonal fluctuations. We tend to experience higher revenue from our hotels and packages business in the second and fourth calendar quarters of each year, which coincide with the summer holiday travel season and the year-end holiday travel season in India. In our air ticketing business, we tend to experience higher revenues in the third and fourth calendar quarters of each year and lower revenue in the first calendar quarter, mainly as a result of changes in demand for business travel. As a result, quarter-to-quarter comparisons of our results may not be meaningful.

 

Changing Laws, Rules and Regulations and Legal Uncertainties, Including Adverse Application of Tax Laws and Regulations, May Adversely Affect Our Business and Financial Performance.

 

Our business and financial performance could be adversely affected by unfavorable changes in or interpretations of existing, or the promulgation of new, laws, rules and regulations applicable to us and our business, including those relating to the Internet and e-commerce, consumer protection and privacy. Such unfavorable changes could decrease demand for our services and products, increase costs and/or subject us to additional liabilities. For example, there may continue to be an increasing number of laws and regulations pertaining to the Internet and e-commerce, which may relate to liability for information retrieved from or transmitted over the Internet or mobile networks, user privacy, taxation and the quality of services and products sold or provided through the Internet. Furthermore, the growth and development of e-commerce may result in more stringent consumer protection laws that may impose additional burdens on online businesses generally.

 

The application of various Indian and international sales, use, occupancy, value-added and other tax laws, rules and regulations to our services and products is subject to interpretation by the applicable taxing authorities. Many of the statutes and regulations that impose these taxes were established before the growth of the Internet, mobile networks and e-commerce. If such tax laws, rules and regulations are amended, new adverse laws, rules or regulations are adopted or current laws are interpreted adversely to our interests, particularly with respect to occupancy or value-added or other taxes, the results could increase our tax payments (prospectively or retrospectively) and/or subject us to penalties and, if we pass on such costs to our customers, decrease the demand for our services and products. As a result, any such changes or interpretations could have an adverse affect on our business and financial performance. We received a notice in October 2010 from the Indian tax regulatory authority for a demand of service tax on certain matters, some of which relate to the travel industry in India and involve complex interpretation of law. We have also received a notice and few assessment orders from the Indian income tax authorities. See “Business — Legal Proceedings.”

Infrastructure in India May Not Be Upgraded in Order to Support Higher Internet Penetration, Which May Result in Additional Investments and Expenses for Us.

 

The majority of our bookings are made through our Indian website. However, Internet penetration in India was only 6.9% in 2010, according to Internet World Stats. There can be no assurance that Internet penetration in India will increase in the future as slowdowns or disruptions in upgrading efforts for infrastructure in India could reduce the rate of increase in the use of the Internet. As such we may need to make additional investments in alternative distribution channels. Further, any slowdown or negative deviation in the anticipated increase in Internet penetration in India may adversely affect our business and prospects.

 

Our Significant Shareholders Will Be Able to Exercise Significant Influence over Our Company After This Offering and May Have Interests That Are Different from Those of Our Other Shareholders.

 

After the completion of this offering, SB Asia Investment Fund II L.P., or SAIF, will own     % of the issued and outstanding shares of our company and each of Mr. Deep Kalra, Tiger Global, Helion Venture Partners, LLC, or Helion Venture, will beneficially own more than     % of the issued and outstanding shares of our company. By virtue of such significant shareholdings, these shareholders will have the ability to exercise significant influence over our company and our affairs and business, including the election of directors, the timing and payment of dividends, the adoption and amendments to our Constitution, the approval of a merger or sale of substantially all our assets and the approval of most other actions requiring the approval of our shareholders. The interests of these shareholders may be different from or conflict with the interests of our other shareholders and their influence may result in the delay or prevention of a change of management or control of our company, even if such a transaction may be beneficial to our other shareholders.

 

Our Results of Operations Are Subject to Fluctuations in Currency Exchange Rates.

 

As the functional currency of MMT India, our key operating subsidiary, is the Indian Rupee, our exposure to foreign currency risk primarily arises in respect of our non-Indian Rupee-denominated trade and other receivables, trade and other payables, and cash and cash equivalents. Based on our operations in fiscal year 2011, a 10.0% appreciation of the US dollar against the Indian Rupee as of December 31, 2010, assuming all other variables remained constant, would have decreased our profit for the nine months ended December 31, 2010 by $0.1 million. Similarly, a 10.0% depreciation of the US dollar against the Indian Rupee as of December 31, 2010, assuming all other variables remained constant, would have increased our profit for the nine months ended December 31, 2010 by $0.1 million. Based on our operations in fiscal year 2010, a 10.0% appreciation of the US dollar against the Indian Rupee as of March 31, 2010, assuming all other variables remained constant, would have decreased our loss for the year by $0.2 million. Similarly, a 10.0% depreciation of the US dollar against the Indian Rupee as of March 31, 2010, assuming all other variables remained constant, would have increased our loss for the year by $0.2 million.

 

We are also exposed to movements between the US dollar and the Indian Rupee in our operations, as approximately 9.1% and 7.5% of our revenue for fiscal year 2010 and the nine months ended December 31, 2010, respectively, was generated by MMT India from its air ticketing business and received in US dollars although our expenses are generally incurred in Indian Rupees. Additionally, we receive revenue from our hotels and packages segment in Indian Rupees, but a portion of our expenses in this segment (those relating to outbound packages from India in particular) could be incurred in a non-Indian currency. We currently do not have any hedging agreements or similar arrangements with any counter-party to cover our exposure to any fluctuations in foreign exchange rates. While, we do incorporate margins in our pricing to cover any adverse fluctuations in foreign exchange rates, there can be no assurance that such margins will adequately protect us from adverse fluctuations in foreign exchange rates and hence our earnings remain susceptible to foreign exchange rate fluctuations.

 

Our Ability to Attract, Train and Retain Executives and Other Qualified Employees Is Critical to Our Business, Results of Operations and Future Growth.

 

Our business and future success is substantially dependent on the continued services and performance of our key executives, senior management and skilled personnel, particularly personnel with experience in our industry and our information technology and systems. Any of these individuals may choose to terminate their employment with us at any time and we cannot assure you that we will be able to retain these employees or find adequate

replacements, if at all. The specialized skills we require can be difficult, time-consuming and expensive to acquire and/or develop and, as a result, these skills are often in short supply. A lengthy period of time may be required to hire and train replacement personnel when skilled personnel depart our company. Our ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees. We may be required to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting the quality of employees that our business requires. If we do not succeed in attracting well-qualified employees or retaining or motivating existing employees, our business and prospects for growth could be adversely affected.

 

Risks Related to Operations in India

 

A Substantial Portion of Our Business and Operations Are Located in India and We Are Subject to Regulatory, Economic, Social and Political Uncertainties in India.

 

A substantial portion of our business and employees are located in India, and we intend to continue to develop and expand our business in India. Consequently, our financial performance and the market price of our ordinary shares will be affected by changes in exchange rates and controls, interest rates, changes in government policies, including taxation policies, social and civil unrest and other political, social and economic developments in or affecting India.

 

The Government of India has exercised and continues to exercise significant influence over many aspects of the Indian economy. Since 1991, successive Indian governments have generally pursued policies of economic liberalization and financial sector reforms, including by significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant and we cannot assure you that such liberalization policies will continue. The present government, formed in May 2009, has announced policies and taken initiatives that support the continued economic liberalization policies that have been pursued by previous governments. However, the present government is a multiparty coalition and therefore there is no assurance that it will be able to generate sufficient cross-party support to implement such policies or initiatives. The rate of economic liberalization could change, and specific laws and policies affecting travel service companies, foreign investments, currency exchange rates and other matters affecting investments in India could change as well. A significant change in India’s policy of economic liberalization and deregulation or any social or political uncertainties could adversely affect business and economic conditions in India generally and our business and prospects.

 

As the Domestic Indian Market Constitutes a Significant Source of Our Revenue, a Slowdown in Economic Growth in India Could Cause Our Business to Suffer.

 

In fiscal year 2010 and in the nine months ended December 31, 2010, 94.7% and 97.1%, respectively, of our revenue was derived directly from sales by our subsidiary in India. The performance and growth of our business are necessarily dependent on economic conditions prevalent in India, which may be materially and adversely affected by political instability or regional conflicts, a general rise in interest rates, inflation, economic slowdown elsewhere in the world or otherwise. The CIA World Factbook estimates that consumer inflation in India was 8.3% in 2008, 10.9% in 2009 and 11.7% in 2010. The Indian economy also remains largely driven by the performance of the agriculture sector which depends on the quality of the monsoon which is difficult to predict. The Indian economy has grown significantly over the past few years. In the past, economic slowdowns in the Indian economy have harmed the travel industry as customers have less disposable income for their travels, especially holiday travel. Any future slowdown in the Indian economy or a further increase in inflation could have a material adverse effect on the demand for the travel products we sell and, as a result, on our financial condition and results of operations.

 

Trade deficits could also adversely affect our business and the price of our ordinary shares. India’s trade relationships with other countries and its trade deficit, driven to a major extent by global crude oil prices, may adversely affect Indian economic conditions. If trade deficits increase or are no longer manageable because of the rise in global crude oil prices or otherwise, the Indian economy, and therefore our business, our financial performance and the price of our ordinary shares could be adversely affected.

India also faces major challenges in sustaining its growth, which include the need for substantial infrastructure development and improving access to healthcare and education. If India’s economic growth cannot be sustained or otherwise slows down significantly our business and prospects could be adversely affected.

 

The Travel Industry in India is Susceptible to Extraneous Events Such As Terrorist Attacks and Other Acts of Violence, Which May Result in a Reduction in Travel Volumes to Affected Areas.

 

Terrorist attacks and other acts of violence or war involving India or other neighboring countries may adversely affect the Indian markets and the worldwide financial markets. As many terrorist attacks tend to be focused on tourists or tourist destinations, such acts may also result in a reduction in confidence in the Indian travel industry and could adversely impact our business and prospects. In addition, any deterioration in international relations between India and other countries may result in concerns regarding regional stability which could adversely affect the price of our ordinary shares. The occurrence of any of these events may result in a loss of business confidence and have an adverse effect on our business and financial performance.

 

South Asia has also experienced instances of civil unrest and hostilities among neighboring countries from time to time, including between India and Pakistan. Military confrontations between India and Pakistan have occurred along the India/Pakistan border. There have also been incidents in and near India such as terrorist attacks in Mumbai, Jaipur and Delhi, troop mobilizations along the India/Pakistan border and an aggravated geopolitical situation in the region. Such military activity, terrorist attacks or other adverse social, economic and political events in India in the future could adversely affect the Indian economy by disrupting communications and making travel more difficult. Resulting political tensions could create a greater perception that investments in Indian companies involve a high degree of risk and could have an adverse impact on our business and the price of our ordinary shares. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue our operations. While we maintain insurance for losses arising from terrorist activities, our insurance policies do not cover business interruptions from terrorist attacks or for other reasons.

 

Natural Calamities Could Have a Negative Impact on the Indian Economy and Cause Our Business to Suffer.

 

India has experienced natural calamities such as earthquakes, tsunamis, floods and drought in the past few years. In December 2004, Southeast Asia, including both the eastern and western coasts of India, experienced a massive tsunami, and in October 2005, the State of Jammu and Kashmir experienced an earthquake, both of which events caused significant loss of life and property damage. The extent and severity of these natural disasters determines their impact on the Indian economy. Substantially all of our operations and employees are located in India and there can be no assurance that we will not be affected by natural disasters in the future. Furthermore, if any of these natural disasters occur in tourist destinations such as the tsunami in 2004 which affected the state of Kerala, a popular vacation destination in India, travel to and within India could be adversely affected, which could have an adverse impact on our business and financial performance.

 

Restrictions on Foreign Investment in India May Prevent Us from Making Future Acquisitions or Investments in India, Which May Adversely Affect Our Results of Operations, Financial Condition and Financial Performance.

 

India regulates ownership of Indian companies by foreigners, although some restrictions on foreign investment have been relaxed in recent years. These regulations and restrictions may apply to acquisitions by us or our affiliates, including MMT India and affiliates which are not resident in India, of shares in Indian companies or the provision of funding by us or any other entity to Indian companies within our group. For example, under its consolidated foreign direct investment policy, the Government of India has set out additional requirements for foreign investments in India, including requirements with respect to downstream investments by Indian companies owned or controlled by foreign entities and the transfer of ownership or control of Indian companies in sectors with caps on foreign investment from resident Indian persons or entities to foreigners. These requirements, which currently include restrictions on valuations and sources of funding for such investments and may include prior approval from the Foreign Investment Promotion Board, may adversely affect our ability to make investments in India, including through MMT India. There can be no assurance that we will be able to obtain any required

approvals for future acquisitions or investments in India, or that we will be able to obtain such approvals on satisfactory terms.

 

We May Become Liable to Penalties or Actions Imposed by the Reserve Bank of India in Relation to Delays in Compliance with Certain Reporting Requirements Applicable in Respect of the Acquisition and Transfer of Our Shares by Certain Indian Resident Employees of MMT India and of Issuances of Shares of MMT India to Us.

 

The Reserve Bank of India has prescribed certain reporting requirements in connection with the acquisition and transfer of foreign securities by Indian residents, including periodic filings to be made by an Indian subsidiary of a foreign company with respect to employees acquiring shares under an employee share option scheme, and the issuance of shares of Indian entities to persons resident outside India. In the past, there have been instances where certain of such filings required to be made by our Indian subsidiary, MMT India, in connection with issuances of shares of our company to employees of MMT India under our employee share option scheme and of issuances of shares of MMT India to us, have been inadvertently delayed or incomplete. While we have now made the necessary filings or provided clarifications sought by the Reserve Bank of India with respect to such filings, we may become liable to certain penalties or actions by the Reserve Bank of India, which we are unable to quantify at this time. We have not received any other communication regarding the imposition of any penalty or action from the Reserve Bank of India with respect to such filings.

 

Our Business and Activities Are Regulated by the Competition Act, 2002.

 

The Competition Act, 2002, as amended, or the Competition Act, several provisions of which have recently come into force, seeks to prevent practices that could have an appreciable adverse effect on competition. Under the Competition Act, any arrangement, understanding or action between enterprises, whether formal or informal, which causes or is likely to cause an appreciable adverse effect on competition is void and will be subject to substantial penalties. Any agreement that directly or indirectly determines purchase or sale prices, limits or controls production, or creates market sharing by way of geographical area or number of customers in the market is presumed to have an appreciable adverse effect on competition. Provisions relating to the regulations of certain acquisitions, mergers or amalgamations which have an appreciable adverse effect on competition are not yet in force. Such provisions could, if brought into force in the future, be applicable to us.

 

The effect of the Competition Act on the business environment in India is unclear. If we or any member of our group, including MMT India, are affected, directly or indirectly, by the application or interpretation of any provision of the Competition Act or any enforcement proceedings initiated by the Competition Commission of India or any adverse publicity that may be generated due to scrutiny or prosecution by the Competition Commission of India, our business and financial performance may be materially and adversely affected.

 

Risks Related to Investments in Mauritian Companies

 

As Our Shareholder, You May Have Greater Difficulties in Protecting Your Interests Than As a Shareholder of a United States Corporation.

 

We are incorporated under the laws of Mauritius. The laws generally applicable to United States corporations and their shareholders may provide shareholders of United States corporations with rights and protection for which there may be no corresponding or similar provisions under the Companies Act 2001 of Mauritius, as amended, or the Mauritius Companies Act. As such, if you invest in our ordinary shares, you may or may not be accorded the same level of shareholder rights and protection that a shareholder of a United States corporation may be accorded under the laws generally applicable to United States corporations and their shareholders. Taken together with the provisions of our Constitution, some of these differences may result in your having greater difficulties in protecting your interests as our shareholder than you would have as a shareholder of a United States corporation. This affects, among other things, the circumstances under which transactions involving an interested director are voidable, whether an interested director can be held accountable for any benefit realized in a transaction with us, what rights you may have as a shareholder to enforce specified provisions of the Mauritius Companies Act or our Constitution, and the circumstances under which we may indemnify our directors and officers.

We May Become Subject to Unanticipated Tax Liabilities That May Have a Material Adverse Effect on Our Results of Operations.

 

We are a Mauritius Category 1 Global Business Company and are tax resident in Mauritius. The Income Tax Act 1995 of Mauritius imposes a tax in Mauritius on the chargeable income of our company at the rate of 15.0%. However, under the Income Tax (Foreign Tax Credit) Regulations 1996 of Mauritius, subject to the Income Tax Act 1995 and the regulations under the Income Tax (Foreign Tax Credit) Regulations 1996, credit is allowed for foreign tax on the foreign source income of a resident of Mauritius against Mauritius tax computed by reference to the same income, and where credit is allowed against Mauritius tax chargeable in respect of any income, the amount of Mauritius tax so chargeable shall be reduced by the amount of the credit. Under the Income Tax (Foreign Tax Credit) Regulations 1996, “foreign source income” means income which is not derived from Mauritius and includes in the case of a corporation holding a Category 1 Global Business Licence under the Financial Services Act 2007 of Mauritius, income derived in the course of a global business. Subject to the provisions of the Income Tax (Foreign Tax Credit) Regulations 1996, no credit is allowed in respect of foreign tax unless written evidence is presented to the Mauritius Revenue Authority showing the amount of foreign tax which has been charged and for this purpose, “written evidence” includes a receipt of the relevant authorities of the foreign country for the foreign tax or any other evidence that the foreign tax has been deducted or paid to the relevant authorities of that country. However, pursuant to regulation 8 of the Income Tax (Foreign Tax Credit) Regulations 1996, if written evidence is not presented to the Mauritius Revenue Authority showing the amount of foreign tax charged on our company’s foreign source income, the amount of foreign tax shall nevertheless be conclusively presumed to be equal to 80% of the Mauritius tax chargeable with respect to that income and in such circumstance, the effective tax rate in Mauritius on our company’s chargeable income would be 3%.

 

Following amendments to the Financial Services Act 2007 of Mauritius pursuant to the Finance (Miscellaneous Provisions) Act 2010 in December 2010, Mauritius companies holding a Category 1 Global Business Licence, or GBC1, issued by the Financial Services Commission in Mauritius are permitted to conduct business both in and outside Mauritius (instead of outside Mauritius only). The operations of a GBC1 company in Mauritius will be subject to tax on chargeable income at the rate of 15% in Mauritius.

 

We hold a tax residence certificate issued by the Mauritius Revenue Authority. We believe that a significant portion of the income derived from our operations will not be subject to tax in countries in which we conduct activities or in which our customers are located, other than Mauritius and India. However, this belief is based on the anticipated nature and conduct of our business, which may change. It is also based on our understanding of our position under the tax laws of the countries in which we have assets or conduct activities. This position is subject to review and possible challenge by taxing authorities and to possible changes in law that may have retroactive effect. Our results of operations could be materially and adversely affected if we become subject to a significant amount of unanticipated tax liabilities.

 

Risks Related to Our Ordinary Shares and this Offering

 

Investors May Have Difficulty Enforcing Judgments against Us, Our Directors and Management.

 

We are incorporated under the laws of Mauritius. Further, we conduct substantially all of our operations in India through our key operating subsidiary in India. The majority of our directors and officers, and some of the experts named in this prospectus, reside outside the United States, and a majority of our assets and some or all of the assets of such persons are located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon us or those persons, or to recover against us or them on judgments of United States courts, including judgments predicated upon the civil liability provisions of the United States federal securities laws. An award of punitive damages under a United States court judgment based upon United States federal securities laws is likely to be construed by Mauritian and Indian courts to be penal in nature and therefore unenforceable in both Mauritius and India. Further, no claim may be brought in Mauritius or India against us or our directors and officers in the first instance for violation of United States federal securities laws because these laws have no extraterritorial application under Mauritian or Indian law and do not have force of law in Mauritius or India. However, a Mauritian or Indian court may impose civil liability, including the possibility of monetary damages, on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under Mauritian or Indian law. Moreover, it is unlikely that a court in Mauritius or India would award

damages on the same basis as a foreign court if an action were brought in Mauritius or India or that a Mauritian or Indian court would enforce foreign judgments if it viewed the amount of damages as excessive or inconsistent with Mauritius or Indian practice or public policy.

 

The courts of Mauritius or India would not automatically enforce judgments of United States courts obtained in actions against us or our directors and officers, or some of the experts named herein, predicated upon the civil liability provisions of the United States federal securities laws, or entertain actions brought in Mauritius or India against us or such persons predicated solely upon United States federal securities laws. Further, there is no treaty in effect between the United States and Mauritius providing for the enforcement of judgments of United States courts in civil and commercial matters and the United States has not been declared by the Government of India to be a reciprocating territory for the purposes of enforcement of foreign judgments, and there are grounds upon which Mauritian or Indian courts may decline to enforce the judgments of United States courts. Some remedies available under the laws of United States jurisdictions, including remedies available under the United States federal securities laws, may not be allowed in Mauritian or Indian courts if contrary to public policy in Mauritius or India (as the case may be). Because judgments of United States courts are not automatically enforceable in Mauritius or India, it may be difficult for you to recover against us or our directors and officers or some experts named in this prospectus based upon such judgments. In India, prior approval of the Reserve Bank of India is required in order to repatriate any amount recovered pursuant to such judgments. See “Enforceability of Civil Liabilities.”

 

As a Foreign Private Issuer, We are Permitted to, and We Will, Follow Certain Home Country Corporate Governance Practices in Lieu of Certain Nasdaq Requirements Applicable to US Issuers. This May Afford Less Protection to Holders of Our Ordinary Shares.

 

As a foreign private issuer whose ordinary shares are listed on the Nasdaq Global Market, we are permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq Global Market requirements. A foreign private issuer must disclose in its annual reports filed with the Securities and Exchange Commission, or the SEC, each Nasdaq Global Market requirement with which it does not comply followed by a description of its applicable home country practice. As a company incorporated in Mauritius and listed on the Nasdaq Global Market, we expect to follow our home country practice with respect to the composition of our board of directors and nominations committee and executive sessions. Unlike the requirements of the Nasdaq Global Market, the corporate governance practice and requirements in Mauritius do not require us as a Mauritius Category 1 Global Business Company to have a majority of our board of directors to be independent; do not require us as a Mauritius Category 1 Global Business Company to establish a nominations committee; and do not require us to hold regular executive sessions where only independent directors shall be present. Such Mauritian home country practices may afford less protection to holders of our ordinary shares.

 

An Active or Liquid Trading Market for Our Ordinary Shares May Not Be Maintained and the Trading Price for Our Ordinary Shares May Fluctuate Significantly.

 

While this offering will increase the number of our ordinary shares publicly trading in the United States, an active, liquid trading market for our ordinary shares may not be maintained in the long term and we cannot be certain that any trading market for our ordinary shares will be sustained or that the present price will correspond to the future price at which our ordinary shares will trade. Loss of liquidity could increase the price volatility of our ordinary shares.

 

Any additional issuance of ordinary shares would dilute the positions of existing investors in the ordinary shares and could adversely affect the market price of our ordinary shares. We cannot assure you that our ordinary shares will not decline below their public offering price. The public offering price of our shares will be determined by reference to the prevailing market price and market conditions at the time of pricing. You may be unable to sell your ordinary shares at a price that is attractive to you.

 

Because the Public Offering Price Is Substantially Higher Than Our Book Value Per Ordinary Share, You Will Incur Immediate and Substantial Dilution.

 

Purchasers of our ordinary shares will experience immediate and substantial dilution in net tangible book value per ordinary share from the public offering price per ordinary share. After giving effect to the issuance of ordinary shares upon the exercise of share options held by certain of our selling shareholders for sale in this offering and the

sale of ordinary shares offered by this prospectus, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us in this offering, our net tangible book value as of December 31, 2010 would have been approximately $           million, or $           per ordinary share. This represents an immediate dilution in net tangible book value of $           per ordinary share to investors in this offering. For a calculation of the dilution purchasers in this offering will incur, see “Dilution.”

 

The Sale or Availability for Sale of Substantial Amounts of Our Ordinary Shares Could Adversely Affect Their Market Price.

 

Sales of substantial amounts of our ordinary shares in the public market after the completion of this offering, or the perception that such sales could occur, could adversely affect the market price of our ordinary shares and could materially impair our future ability to raise capital through offerings of our ordinary shares.

 

We will have 36,573,699 ordinary shares outstanding immediately after this offering (assuming the issuance of 59,880 ordinary shares upon the exercise of share options held by certain of our selling shareholders for sale in this offering, effective upon the completion of this offering), or 36,813,699 ordinary shares if the underwriters exercise their option to purchase additional ordinary shares in full. Further, although certain of our share option holders are subject to restrictions on selling shares acquired upon the exercise of options, the majority of the options granted under our equity option plan will continue to be exercisable following the completion of this offering. All of the ordinary shares sold in this offering will be freely tradable without restriction or further registration under the US Securities Act of 1933, or the Securities Act, unless held by our “affiliates” as that term is defined in Rule 144 under the Securities Act. Subject to the 90-day lock-up restrictions described below and other applicable restrictions and limitations under Rule 144 of the Securities Act, all of our shares outstanding prior to this offering will be eligible for sale in the public market. If these shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our ordinary shares could decline.

 

In connection with this offering, we, the selling shareholders and Tiger Global, one of our shareholders, have agreed, subject to some exceptions, not to sell any ordinary shares for 90 days after the date of this prospectus without the written consent of the underwriters. However, the underwriters may release these ordinary shares from these lock-up restrictions at any time. We cannot predict what effect, if any, market sales of ordinary shares held by our significant shareholders or any other shareholder or the availability of these ordinary shares for future sale will have on the market price of our ordinary shares.

 

Future Issuances of Any Equity Securities May Decrease the Trading Price of Our Ordinary Shares.

 

Any issuance of equity securities after this offering could dilute the interests of our shareholders and could substantially decrease the trading price of our ordinary shares. We may issue equity or equity-linked securities in the future for a number of reasons, including to finance our operations and business strategy (including in connection with acquisitions and other transactions), to adjust our ratio of debt to equity, to satisfy our obligations upon the exercise of then-outstanding options or other equity-linked securities, if any, or for other reasons.

 

We Will Have Considerable Discretion As to the Use of the Net Proceeds to be Received by Us from This Offering.

 

Our allocation of the net proceeds to be received by us of this offering is based on current plans and business conditions. The amounts and timing of any expenditure will vary depending on the amount of cash generated by our operations, competitive, market as well as technological developments, and the number and type of new acquisitions or investments we undertake. Accordingly, our management will have considerable discretion in the application of the net proceeds received by us. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our results of operations or increase our share price. The net proceeds from this offering, pending investment in operating assets or businesses, or technological enhancement, may be placed in investments that do not produce income or that lose value, which will cause the price of our ordinary shares to decline.

Our Holding Company Will Have to Rely Principally on Dividends and Other Distributions on Equity Paid by Our Operating Subsidiaries and Limitations on Their Ability to Pay Dividends to Our Holding Company Could Adversely Impact Your Ability to Receive Dividends on Our Ordinary Shares.

 

Dividends and other distributions on equity paid by our operating subsidiaries will be our holding company’s principal source for cash in order for us to be able to pay any dividends and other cash distributions to our shareholders. As of the date of this prospectus, MMT India has not paid any cash dividends on its equity shares. If our operating subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to our holding company. As our key operating subsidiary is established in India, it is also subject to certain limitations with respect to dividend payments. See “Dividends and Dividend Policy” for further information.

 

Compliance with Rules and Requirements Applicable to Public Companies May Cause Us to Incur Additional Costs, and Any Failure by Us to Comply with Such Rules and Requirements Could Negatively Affect Investor Confidence in Us and Cause the Market Price of Our Ordinary Shares to Decline.

 

As a public company, we incur significant legal, accounting and other expenses. We have begun the process of bringing our company into compliance with applicable financial reporting regulations including the requirements under section 404 of the Sarbanes-Oxley Act. We have a senior manager and two other employees who are responsible for implementation of requirements under the Sarbanes-Oxley Act. We are in the process of evaluating and hiring consultants and new staff. Complying with these rules and requirements may be particularly difficult and costly for us because we may have difficulty finding sufficient personnel in India with experience and expertise relating to IFRS and United States public-company reporting requirements, and such personnel may be costly. If we cannot employ sufficient qualified and experienced personnel to ensure compliance with these rules and regulations, we may need to rely more on outside legal, accounting and financial experts, which may be costly. In addition, we will incur additional costs associated with our public company reporting requirements. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

 

We May Be Classified as a Passive Foreign Investment Company, Which Could Result in Adverse US Federal Income Tax Consequences to US Holders of Our Ordinary Shares.

 

Based on, among other things, the current and anticipated valuation of our assets and composition of our income and assets, we do not expect to be a passive foreign investment company, or PFIC, for US federal income tax purposes for our current taxable year ending March 31, 2011. However, we must make a separate determination after the close of each taxable year as to whether we were a PFIC for that year. Accordingly, we cannot assure you that we will not be a PFIC for our current taxable year or any future taxable year. A non-US corporation will be a PFIC for any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our ordinary shares, fluctuations in the market price of the ordinary shares may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. If we are a PFIC for any taxable year during which a US Holder (as defined in “Taxation — US Federal Income Taxation”) holds an ordinary share, certain adverse US federal income tax consequences could apply to such US Holder. See “Taxation — US Federal Income Taxation — Passive Foreign Investment Company.”

 

This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry Overview” and “Business.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

 

In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions.

 

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and the following:

 

 

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results or performance may be materially different from what we expect.

 

We are incorporated in Mauritius and our primary operating subsidiary, MMT India, is incorporated in India. The majority of our directors and executive officers are not residents of the United States and substantially all of our assets and the assets of such persons are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon such persons or us. In addition, you may be unable to enforce judgments obtained in courts of the United States against such persons outside the jurisdiction of their residence, including judgments predicated solely upon US securities laws.

 

There is uncertainty as to whether the courts in Mauritius would enforce judgments obtained in the United States against us or our directors or executive officers, as well as the experts named herein, based on the civil liability provisions of the securities laws of the United States or allow actions in Mauritius against us or our directors or executive officers based only upon the securities laws of the United States. Further, foreign judgments may not be given effect to by a Mauritius court where it would be contrary to any principle affecting public policy in Mauritius or to the extent that they constitute the payment of an amount which is in the nature of a penalty and not in the nature of liquidated damages.

 

In addition to and irrespective of jurisdictional issues, neither Mauritian nor Indian courts will enforce a provision of the US federal securities laws that is either penal in nature or contrary to public policy. An action brought pursuant to a public or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the state in its sovereign capacity, is unlikely to be entertained by Mauritian or Indian courts. Specified remedies available under the laws of US jurisdictions, including specified remedies under US federal securities laws, would not be available under Mauritian or Indian law or enforceable in a Mauritian or Indian court, if they are considered to be contrary to Mauritian or Indian public policy (as the case may be). An award of punitive damages under a United States court judgment based upon United States federal securities laws is likely to be construed by Mauritian and Indian courts to be penal in nature and therefore unenforceable in both Mauritius and India. Further, no claim may be brought in Mauritius or India against us or our directors and officers, as well as the experts named herein, in the first instance for a violation of US federal securities laws because these laws have no extraterritorial application under Mauritian or Indian law and do not have force of law in Mauritius or India.

 

Section 44A of the Indian Code of Civil Procedure, 1908, as amended, or the Civil Procedure Code, provides that where a foreign judgment has been rendered by a superior court in any country or territory outside of India which the Government of India has by notification declared to be a reciprocating territory, such foreign judgment may be enforced in India by proceedings in execution as if the judgment had been rendered by an appropriate court in India. However, the enforceability of such judgments is subject to the exceptions set forth in Section 13 of the Civil Procedure Code. This section, which is the statutory basis for the recognition of foreign judgments, states that a foreign judgment is conclusive as to any matter directly adjudicated upon except:

 

 

Section 44A of the Civil Procedure Code is applicable only to decrees or judgments under which a sum of money is payable not being in the nature of amounts payable in respect of taxes or other charges of a similar nature or in respect of fines or other penalties and does not include arbitration awards. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action were brought in India. Furthermore, it is unlikely that an Indian court would enforce a foreign judgment if it viewed the amount of damages awarded as excessive or inconsistent with public policy or practice in India.

If a judgment of a foreign court is not enforceable under Section 44A of the Civil Procedure Code as described above, it may be enforced in India only by a suit filed upon the judgment, subject to Section 13 of the Civil Procedure Code, and not by proceedings in execution. The United States has not been declared by the Government of India to be a reciprocating territory for the purposes of Section 44A of the Civil Procedure Code. Accordingly, a judgment of a court in the United States may be enforced only by filing a fresh suit on the basis of the judgment and not by proceedings in execution.

 

The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is difficult to predict whether a suit brought in an Indian court will be disposed of in a timely manner or be subject to untimely delay.

 

A party seeking to enforce a foreign judgment in India is required to obtain prior approval from the Reserve Bank of India under the Foreign Exchange Management Act, 1999, as amended, to repatriate any amount recovered pursuant to such enforcement. Any judgment in a foreign currency would be converted into Indian Rupees on the date of judgment and not on the date of payment.

 

A final and conclusive judgment in the superior courts of a foreign jurisdiction, or foreign courts, other than the courts of the United Kingdom, under which a sum of money is payable (other than a sum payable in respect of taxes, fines, penalties or similar charges) may be recognized by, and be enforceable in, the courts of Mauritius if (1) the judgment is still valid, final and is capable of execution in the jurisdiction in which it was delivered; (2) the judgment is not contrary to any principle affecting public policy in Mauritius; (3) the foreign courts had jurisdiction to hear the claim; and (4) our company had been regularly summoned to attend the proceedings before the foreign courts. Any judgment expressed in a foreign currency by a foreign court, may, when made executory in Mauritius, be expressed in that foreign currency. A valid and final judgment rendered by a court in the United States may not be enforced in Mauritius except by way of exequatur under the Mauritius Code on Civil Procedure. The exequatur may be sought in Mauritius so long as the valid and final judgment is capable of execution in the United States.

 

A final and conclusive judgment or order in the superior courts of the United Kingdom under which a sum of money is made payable (and including an award in proceedings on an arbitration if the award has, under the law in force in the place where it was made, become enforceable in the same manner as a judgment by a court in that place) would, on registration in accordance with the provisions of The Reciprocal Enforcement of Judgments Act 1923 be enforceable in the Supreme Court of Mauritius. Any judgment expressed in pounds sterling or other currency by a superior court of the United Kingdom, may, when made executory in Mauritius, be expressed in pounds sterling or any other currency at the rate of exchange prevailing at the date of judgment of the original court.

 

The net proceeds we will receive from the sale of the ordinary shares offered by us will be approximately $           million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The underwriters have agreed to pay for certain expenses in connection with this offering. If the underwriters exercise their option to purchase 900,000 additional ordinary shares in full, our net proceeds from the sale of the ordinary shares offered by us will be approximately $           million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of ordinary shares by the selling shareholders.

 

We intend to use the net proceeds received by us from this offering to expand our operations by acquiring or investing in strategic businesses or assets that complement our service and product offerings, to invest in enhancements to our technology, as well as for working capital and other general corporate purposes. At this time, we have not entered into any agreement or commitment with respect to any material acquisitions or investments.

 

We have not yet determined all of our expected expenditures, and we cannot estimate the amounts to be used for the purposes set forth above. The amounts and timing of any expenditures will depend on the amount of cash generated by our operations, competitive and market developments and the availability of acquisition or investment opportunities on terms acceptable to us. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. See “Risk Factors — Risks Related to Our Ordinary Shares and this Offering — We Will Have Considerable Discretion As to the Use of the Net Proceeds to Be Received by Us from This Offering.”

 

Pending use of the net proceeds as described above, we intend to invest the net proceeds of this offering in short-term, interest-bearing bank deposits or money market funds. These investments may have a material adverse effect on the US federal income tax consequences of your investment in our ordinary shares. See “Risk Factors — Risks Related to Our Ordinary Shares and this Offering — We May Be Classified as a Passive Foreign Investment Company, Which Could Result in Adverse US Federal Income Tax Consequences to US Holders of Our Ordinary Shares” and “Taxation — US Federal Income Taxation — Passive Foreign Investment Company.”

 

The following table sets forth our indebtedness and capitalization as of December 31, 2010:

 

 

You should read this table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

 

 

 

 

Since our incorporation, no dividends have been declared or paid on our ordinary shares. We currently intend to retain our earnings, if any, to finance the development and growth of our business and operations as well as expand our business and do not currently anticipate paying dividends on our ordinary shares in the near future.

 

Under Mauritius law, we may only pay dividends out of retained earnings, after having made good any accumulated losses at the beginning of the relevant accounting period and no distribution (which term includes dividend) may be made unless our board of directors is satisfied that upon the distribution being made (1) our company is able to pay its debts as they become due in the normal course of business and (2) the value of our company’s assets is greater than the sum of (a) the value of its liabilities and (b) our company’s stated capital (which refers to the total of all amounts received by our company or due and payable to our company in respect of the nominal paid-up value of our issued shares and share premiums paid to our company in relation to such shares). Subject to the Mauritius Companies Act and our Constitution, the declaration and payment of any dividend has to be authorized by our board of directors and is subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, cash flows, capital requirements, general financial condition, contractual restrictions and other factors which our directors may deem relevant. Cash dividends, if any, will be paid in US dollars. Other distributions, if any, will be made to our shareholders by any means which our directors deem fair, legal and practicable.

 

As we are a holding company, we will have to rely on dividends paid to us by our subsidiaries (in particular, our key operating subsidiary in India, MMT India) for our cash requirements, including funds to pay dividends and other cash distributions to our shareholders, service any debt we may incur and pay our operating expenses. Our ability to pay dividends to our shareholders will depend on, among other things, the availability of dividends from MMT India.

 

As of the date of this prospectus, MMT India has not paid any cash dividends on its equity shares. Dividends other than in cash are not permitted under Indian law. The declaration and payment of any dividends in the future will be recommended by the board of directors of MMT India and approved by the shareholders of MMT India at their discretion and would depend on a number of factors, including its financial condition, results of operations, capital requirements and surplus, contractual obligations, applicable Indian legal restrictions, the provisions of its articles of association, the terms of its credit facilities and other financing arrangements at the time a dividend is considered and other factors considered relevant by the board of directors. MMT India may also from time to time pay interim dividends. MMT India is liable to pay dividend distribution tax in India at the rate of 15.0%, plus applicable cess and surcharge, on any dividends paid by it.

 

Under Indian law, a company declares dividends upon a recommendation by its board of directors and approval by a majority of the shareholders at the annual general meeting of shareholders held within six months of the end of each fiscal year. However, while final dividends can be paid out by a company only after such dividends have been recommended by the board of directors and approved by shareholders, interim dividends can be paid out with only a recommendation by the board of directors. The shareholders have the right to decrease but not to increase any dividend amount recommended by the board of directors. Under Indian law, shares of a company belonging to the same class must receive equal dividend treatment.

 

Under Indian law, a company is permitted to declare or pay dividends in any year from profits for that year only if it transfers a specified percentage of profits for that year to the reserves of the company as prescribed by the Companies Act, 1956, as amended, or the Companies Act, and applicable rules thereunder. We intend to make such transfers to our general reserves in anticipation of any dividends we may pay.

If profits for a particular year are insufficient to declare dividends (including interim dividends), the dividends for that year may be declared and paid out from accumulated profits if the following conditions are fulfilled:

 

 

If you invest in our ordinary shares, your interest will be diluted to the extent of the difference between the public offering price per ordinary share and our net tangible book value per ordinary share after this offering. Dilution results from the fact that the public offering price per ordinary share is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares.

 

As of December 31, 2010, we had net tangible book value of $70.77 million, or $2.03 per ordinary share outstanding as of that date. Our net tangible book value is determined by subtracting the value of our intangible assets and total liabilities from our total assets.

 

Dilution is determined by subtracting net tangible book value per ordinary share from the public offering price per ordinary share of $          , after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

 

Without taking into account any other changes in net tangible book value after December 31, 2010, other than to give effect to (1) the issuance of ordinary shares upon the exercise of share options held by certain of our selling shareholders for sale in this offering, to be effected upon the completion of this offering; and (2) our sale of the ordinary shares offered in this offering, with estimated net proceeds of $      million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, our proforma net tangible book value as of December 31, 2010 would have been $           million and $           per outstanding ordinary share. This represents an immediate dilution in proforma net tangible book value of $           per ordinary share to new investors in this offering.

 

The following table illustrates such dilution per ordinary share

 

 

Assuming the underwriters’ over-allotment option is exercised in full, our net tangible book value as of December 31, 2010 (after giving effect to the issuance of shares pursuant to the exercise of options for sale in this offering, and this offering) would have been $      million and $      per outstanding ordinary share. This represents an immediate dilution in proforma net tangible book value of $           per ordinary share to new investors in this offering.

 

The following table summarizes, on a proforma basis as of December 31, 2010 (assuming the exercise of share options by certain of our selling shareholders for sale in this offering occurred on such date), the differences between the number of ordinary shares purchased from us, the total consideration paid to us and the average price per ordinary share that existing shareholders paid for their shares and new investors paid, before deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

 

The discussion and tables above assume no exercise of any outstanding share options other than such options to be exercised by certain of our selling shareholders effective upon completion of this offering. As of January 31, 2011, there were 1,645,537 ordinary shares issuable upon exercise of outstanding share options with exercise prices ranging from $0.0005 to $5.39 (excluding those outstanding share options to be exercisable by certain of our selling shareholders effective upon completion of this offering), and there were ordinary shares available for future issuance upon the exercise of future grants under our equity option plan. To the extent that any of these options is exercised, there will be further dilution to new investors.

 

Our consolidated financial statements and other financial data included in this prospectus are presented in US dollars. Our business and operations are primarily conducted in India through our Indian subsidiary, MMT India. The functional currency of MMT India is Indian Rupees and its revenues and expenses are denominated in that currency. We report our consolidated financial results in US dollars. The conversion of Indian Rupees into US dollars in this prospectus is based on the noon buying rate in The City of New York for cable transfers of Indian Rupees as certified for customs purposes by the Federal Reserve Bank of New York. For your convenience, unless otherwise noted, all translations from Indian Rupees to US dollars and from US dollars to Indian Rupees in this prospectus were made at a rate of Rs. 45.92 to $1.00, the noon buying rate in effect as of January 31, 2011. We make no representation that any Indian Rupee or US dollar amounts referred to in this prospectus could have been or could be converted into US dollars or Indian Rupees, as the case may be, at any particular rate or at all. The effects of foreign currency translation adjustments are included as a component of other comprehensive income in our shareholders’ equity.

 

The following table sets forth, for each of the periods indicated, the low, average, high and period-end noon buying rates in The City of New York for cable transfers, in Indian Rupees per US dollar, as certified for customs purposes by the Federal Reserve Bank of New York. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of our periodic reports or any other information to be provided to you.

 

 

 

 

Our outstanding ordinary shares are currently listed and traded on the Nasdaq Global Market under the symbol “MMYT.” As at January 31, 2011, 34,913,819 ordinary shares were outstanding.

 

The following table shows:

 

 

 

 

 

The following selected consolidated statement of comprehensive income and loss data for fiscal years 2008, 2009 and 2010, and the selected consolidated statement of financial position data as of March 31, 2009 and 2010, have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The following selected consolidated statement of financial position data as of March 31, 2008 have been derived from our audited consolidated financial statements not included in this prospectus. The following selected consolidated statement of comprehensive income and loss data for the nine months ended December 31, 2009 and 2010, and the selected consolidated statement of financial position data as of December 31, 2010, have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with IFRS as issued by the IASB. Our historical results do not necessarily indicate results expected for any future period.

 

Prior to initiation of our initial public offering that was completed in August 2010, we had not prepared consolidated financial statements. Our India-incorporated and Delaware-incorporated operating subsidiaries prepare financial statements in accordance with Indian Generally Accepted Accounting Principles, or Indian GAAP, and United States Generally Accepted Accounting Principles, or US GAAP, respectively. We have adopted IFRS as issued by the IASB with a transition date of April 1, 2007 and have prepared consolidated financial statements with effect from that date. We represent that selected financial data for fiscal years 2006 and 2007 cannot be prepared and presented below in accordance with IFRS as issued by the IASB without incurring unreasonable effort or expense, as, among other things, our subsidiaries would have to convert their respective financial statements from Indian GAAP to IFRS and from US GAAP to IFRS, in order for the historical financial data to be extracted.

 

 

 

 

The following table sets forth a summary of our consolidated statement of financial position as of March 31, 2008, 2009 and 2010 and December 31, 2010: