Go ibibo- should grow independently or sell? Case study solution on how the merger takes place between Go-Ibibo and MMT the solution talks about the different aspects and the options available for best fit

1. IBIBO: GROW INDEPENDENTLY OR SELL?
PRESENTED BY:-
Abhishek Rajvanshi

2. CONTENTS
• Introduction
• GO IBIBO Journey
• SWOT Analysis
• Porter’s Five Forces Model
• Major Players
• Financial Aspect of Case
• Scenario
Go Ibibo : Case study. 2

3. INTRODUCTION
• ibibo Group is an online travel organization founded in January 2007 by Ashish Kashyap. The
company is a subsidiary of Naspers, which owns an 80% stake in Ibibo group.
• The group owns the B2C online travel aggregator Goibibo, and online bus ticketing platform
Redbus.in, and has a 51% stake in the B2B travel website travelboutiqueonline.com. The company
also owns a minority stake in Naspers' payment gateway business PayU Global
• Goibibo was launched in 2009 and is part of ibibo Group.
• It was co-founded by Sanjay Bhasin and Vikalp Sahni.
• Goibibo is India’s largest hotels aggregator and also one of the leading air aggregator.
• Goibibo's core value differentiator is delivery of the fastest and the most trusted and reliable user
experiences.
• Goibibo is also the number one ranked mobile app under the travel category.
Source:https://en.wikipedia.org/wiki/Ibibo
Go Ibibo : Case study. 3

4. Go Ibibo-JOURNEY
4Go Ibibo : Case study.

5. SWOT ANALYSIS
Go Ibibo : Case study. 5
STRENGTHS
• Great Brand Recall
• Diversified Product Portfolio
• Strong user data base
• User friendly website and app
• Strong backend support
WEAKNESSES
• Dependency on search engines and
providers.
• Offers in website is highly depends on the
hotel.
• Range of business services are identical to
their competitors
OPPORTUNITIES
• Growing online customer.
• Internet penetration with smart phone
• Boom in travel and tourist industry
THREATS
• Fluctuations in the demand.
• Competition.
• People are still reluctant to use internet for
financial transactions like online ticket booking,
hotel booking, etc.

6. PORTER’S FIVE FORCES MODEL
Go Ibibo : Case study. 6
Bargaining Power
of Suppliers
• Medium
Threat of New Entrants
• High possibility of new entrants in
online booking platform.
Threat of Substitutes
or Services
• A large no of substitutes
available in the market
Bargaining Power
of Buyers
• High
Rivalry among
existing firms
• Competition is High

7. Major Players Leading the Indian Market
7Go Ibibo : Case study.

8. FINANCIALASPECT OF CASE STUDY
Go Ibibo : Case study. 8

9. BALANCE SHEET OF IBIBO GROUP
9Go Ibibo : Case study.

10. BALANCE SHEET CALCULATION-2014 TO 2016
Working Capital: Current Assets - Current Liabilities
(IN MILLIONS OF US$) FY 14 FY 15 FY 16
IBIBO GROUP B2C
BUSINESS
30.70-27.50=3.2 26.97-27.65=(-0.68) 28.62-41.31=(-12.69)
IBIBO GROUP PVT LTD 15.68-13.37=2.31 27.08-28.08=(-1) 30.08-37.47=(-7.39)
Working Capital per Dollar of Sales: Working Capital ÷ Total Sales
(IN MILLIONS OF US$) FY 14 FY 15 FY 16
IBIBO GROUP B2C
BUSINESS
- -0.68/29.68=-0.023 -12.69/60.46=-0.21
IBIBO GROUP PVT LTD 2.31/21.33=0.108 -1/46.86=-0.021 -7.39/92.93=-0.079
10Go Ibibo : Case study.

11. BALANCE SHEET CALCULATION-2014 to 2016
Current Ratio: Current Assets ÷ Current Liabilities
(IN MILLIONS OF US$) FY 14 FY 15 FY 16
IBIBO GROUP B2C
BUSINESS
30.7/27.5=1.11 26.97/27.65=0.96 28.62/41.31=0.69
IBIBO GROUP PVT LTD 15.68/13.37=1.17 27.08/28.08=0.96 30.08/37.47=0.80
11Go Ibibo : Case study.

12. BALANCE SHEET OF MAKE MY TRIP
12Go Ibibo : Case study.

13. BALANCE SHEET CALCULATION-2014 TO 2016
Working Capital: Current Assets - Current Liabilities
(IN MILLIONS OF US$) FY 14 FY 15 FY 16
MAKE MY TRIP LIMITED 133.34-96.07=37.27 213.88-115.70=98.17 282.01-124.09=157.92
Working Capital per Dollar of Sales: Working Capital ÷ Total Sales
(IN MILLIONS OF US$) FY 14 FY 15 FY 16
MAKE MY TRIP LIMITED 37.27/255.38=0.145 98.17/299.66=0.33 157.92/336.05=0.47
Current Ratio: Current Assets ÷ Current Liabilities
(IN MILLIONS OF US$) FY 14 FY 15 FY 16
MAKE MY TRIP LIMITED 133.34/96.07=1.38 213.88/115.7=1.84 282.01/124.09=2.27
13Go Ibibo : Case study.

14. COMPARISION OF RATIO’S –FY- 2016
-200
-150
-100
-50
0
50
100
150
200
PAT DEBT TO TOTAL
ASSEST RATIO
RATIO OF
MARKETING
EXPENSES
GROSS REVENUE
GROWTH
IBIBO GROUP B2C
IBIBO GROUP PVT LTD
MAKE MY TRIP
14Go Ibibo : Case study.

15. COMPARISION OF RATIO’S – FY-2015
-150
-100
-50
0
50
100
150
PAT DEBT TO TOTAL
ASSEST RATIO
RATIO OF
MARKETING
EXPENSES
GROSS REVENUE
GROWTH
IBIBO GROUP B2C
IBIBO GROUP PVT LTD
MAKE MY TRIP
15Go Ibibo : Case study.

16. PROFIT & LOSS STATEMENT COMPARISION
16Go Ibibo : Case study.

17. SCENARIO -1
RAISE FUNDING FROM PARENTAL COMPANY
• Ibibo received financial backing from South African Internet giant Naspers, which
held a 91 percent share, and Chinese media company Tencent, which held a 9
percent stake.
• India’s low Internet penetration at 17 per cent, compared with the world average of
34 percent, indicated the country’s huge growth opportunities.
• The Indian Internet population was expected to reach 500 million by 2018.
• The increasing use of debit cards, the online travel industry was reported to be
growing at 17.8 percent annually from 2013 to 2016.
• Online travel and tourism bookings in the overall Indian travel market were
expected to increase from 41 percent in 2014 to 46 per cent in 2017.
• The biggest contributor to the industry was domestic and international air travel (39
per cent), followed by rail travel (28 percent), and hotels (30 per cent).
17Go Ibibo : Case study.

18. SCENARIO -1
RAISE FUNDING FROM PARENTAL COMPANY
• The increased competition among players led to price wars, with each player incurring
heavy losses for every transaction, thereby affecting their margins.
• For FY2016, these discounts amounted to approximately 39 per cent of ibibo’s gross
revenues.
• During FY2016, ibibo became the market leader in hotel bookings with 3.6 million
transactions, representing growth of 420 per cent over the previous year, surpassing market
leader MMT’s 3 million bookings.
• In early 2016, Naspers invested $250 million in the Group & ibibo was number two in the
industry with respect to volume of air transactions and was growing faster than its closest
competitor. In bus ticketing and stand-alone hotel transactions.
• Company suffered a greater than 100 per cent operating loss on its revenues in FY2014–15
and FY2015-16 . While revenues had more than doubled over the previous fiscal year, the
losses soared by 222 per cent.
18Go Ibibo : Case study.

19. SCENARIO -2
OFFER FROM MMT
• The combined entity will bring together top brands in the consumer travel space in India
including MakeMyTrip, Goibibo, redBus, Rightstay and Ryde under one umbrella.
• At the closing, MMYT shareholders will own 60% whereas ibibo shareholders will get a 40%
stake, making Naspers and Tencent the single largest shareholder in MakeMyTrip.
• Deep Kalra and Rajesh Magow will continue their roles as Executive Chairman and India CEO
of MakeMyTrip, respectively. Ibibo's Ashish Kashyap will join the board as President of the
group.
• 14 percent stake in Nasper’s payment business PayU and 52 percent stake in online travel
company Tek Travels will not be a part of the merger.
• MakeMyTrip will own 100 percent of Ibibo Group.
• The company has issued 38.91 million Class B shares to Ibibo group. The entity owned by
Naspers and Tencent is said to have purchased 413,035 new ordinary shares of MakeMyTrip
at $21.19 per share for a total cash consideration of $8.75 million.
• Composition of the board of the merged entity would comprise 10 directors: four from
Naspers–Tencent, one from Ctrip, two from MMT, and three independent directors
19Go Ibibo : Case study.

20. THANK YOU FOR YOUR PATIENCE !!
Go Ibibo : Case study. 20