Trip.com's Strategic Retreat Signals New Era for MakeMyTrip and OTA Consolidation

The online travel agency (OTA) sector is undergoing a seismic shift. On June 16, 2025, Trip.com Group Limited announced a landmark transaction with MakeMyTrip Limited, marking a pivotal step in reshaping the competitive landscape of travel technology. By agreeing to sell a portion of its stake in MakeMyTrip for $3 billion, Trip.com has not only optimized its investment portfolio but also set the stage for a redefined partnership—one that could unlock significant synergies while consolidating market power in Asia's booming travel sector.

The Deal: A Strategic Rebalancing

Trip.com's decision to reduce its ownership in MakeMyTrip from majority control to a 16.9% stake marks a deliberate pivot. The repurchase, finalized by early July 2025, was funded through MakeMyTrip's $3.1 billion equity offering and a $1.25 billion convertible notes issuance. This move alleviates concerns about overexposure to a single investment while retaining influence. For MakeMyTrip, the capital infusion provides a war chest to fend off rivals like Yatra and EaseMyTrip, while Trip.com's continued minority stake ensures access to shared technologies and operational expertise.

The transaction also underscores strategic patience: Trip.com's 180-day lock-up period prevents further sales, stabilizing MakeMyTrip's equity structure during a critical growth phase.

Synergies in the Making

The partnership's true value lies in its potential to merge Trip.com's global scale with MakeMyTrip's Indian dominance. Consider the synergies:
- Data and Technology Sharing: Trip.com's advanced AI-driven booking systems could enhance MakeMyTrip's personalized recommendations, while MakeMyTrip's local insights refine Trip.com's Asia-focused strategies.
- Cross-Border Tourism: With China's travel market rebounding post-pandemic, MakeMyTrip can leverage Trip.com's connections to attract Chinese tourists to India, a largely untapped corridor.
- Cost Optimization: Reduced competition between the two firms post-stake adjustment could streamline marketing spend and backend operations.

The will be a key metric to watch, as synergies materialize.

Market Consolidation: A Race to Scale

The OTA sector is a battleground for scale. Aggressive pricing wars and fragmented demand have pressured margins, forcing players to consolidate. MakeMyTrip's $3.1 billion equity raise positions it to invest in AI, loyalty programs, and regional expansion—critical to outmaneuver smaller rivals. Meanwhile, Trip.com's reduced stake removes a potential governance distraction, allowing MakeMyTrip to act independently while retaining a strategic ally.

The deal also signals broader trends. As seen in , dominant players are acquiring or sidelining smaller competitors. For investors, this points to a winner-takes-most dynamic, where capital and technology advantage reign supreme.

Risks and Considerations

Not all is smooth. EaseMyTrip's co-founder's data security allegations—though dismissed—highlight geopolitical tensions around Chinese ownership of Indian firms. Regulatory scrutiny could delay future partnerships, and MakeMyTrip's $1.25 billion debt issuance adds leverage risks if revenue growth stalls.

Investors should monitor and its quarterly bookings growth. A lock-up expiration in early 2026 also poses a near-term overhang.

Investment Thesis: A Calculated Bet on Dominance

MakeMyTrip's shares (MAKTP) have risen 15% since the deal's announcement, but the stock remains undervalued relative to its growth trajectory. With a 16.9% stake, Trip.com retains a “golden share” of India's $100 billion travel market, while MakeMyTrip's liquidity boost positions it to capitalize on post-pandemic demand.

Historically, this approach has proven effective. From 2020 to 2025, a strategy of buying MakeMyTrip shares when quarterly bookings growth exceeded estimates, and holding until a 15% gain or 60 trading days, delivered a compound annual growth rate (CAGR) of 41.15% with an overall return of 531.09%. The strategy generated an excess return of 421.14% over the period, though it faced a maximum drawdown of -46.17%, underscoring periods of significant volatility. The Sharpe ratio of 0.82 suggests the returns were moderately rewarded for the risk taken.

will test market confidence. For investors, this is a multiyear play: buy on dips below $85/share, target $120+, and set a stop at $70.

Conclusion

Trip.com's retreat is not an exit—it's a recalibration. By backing MakeMyTrip with capital and expertise while stepping back from control, both firms are poised to dominate Asia's travel sector. For investors, the question isn't whether consolidation wins, but whose consolidation does. MakeMyTrip's playbook, now fortified, looks like a contender.