Ibibo's hotel transactions being nearly 50% higher than MMYT's in FY16 (3.6mn vs. 2.4mn), net revenue contribution from standalone hotels seem to be largely similar at US$35mn. This could be due to lower ticket size, lower commission rates or higher direct discounting - clarity on this issue would be important to gauge the future potential of Ibibo. Ibibo's bus revenues on the other hand seems to be larger at US$20mn+ vs.our original estimate of US $12mn.
Based on FY16 closing numbers, management has estimated cash contribution by Ibibo at the time of the merger to be US$117mn. This would imply net cash of over US$300mn on the balance sheet of the combined entity. However, the deal is likely to be closed towards the end of FY17 - given the large burn expected by both Makemytrip and Ibibo in FY17, we expect the eventual net cash position at the time of the closure of the merger to be lower than US$200mn.
