Cleartrip, the India-based online travel and hospitality major, is looking at coming out with an initial public offer (IPO) in the next 2-3 years, a senior company executive said.
The company’s current plan for a major expansion in the Middle East, aimed at achieving its target of mopping up over 50 percent of the total turnover from its international operations, is part of its preparations for the proposed IPO.
The Middle East market, where Cleartrip is the leading player in the online travel and hospitality aggregator segment, currently account for 45 percent of the company’s gross bookings value (GBV) of $1.5 billion.
“I would not say it (IPO plan) is imminent. But it may happen in 2-3 years,” Aditya Agarwal, head of corporate strategy and M&A at Cleartrip, told Arabian Business.
Cleartrip has set a target of crossing a GBV of $2.5 billion in the next 2 years, and its expansion plans in the GCC and the larger MENA regions are part of this growth push.
Another milestone which Cleartrip has set for itself prior to hitting with the market with an IPO is to become profitable in a year’s time.
“We have set a target of becoming profitable by March 2020,” Agarwal said.
Most of the company’s core business activities are already profitable and we have been maintaining a near operational break-even level in the last 4 years, he said.
We are nearly there on meeting some of our core business objectives like getting to profitability, making sure that more than half of our business generated from outside India, etc.
“As we meet more of our objectives, we are coming closer to the day where we start thinking about listing more closely,” Agarwal said.
Abdullah Alromaih of Al Jazeera Paints, a Saudi Arabian conglomerate, is a large shareholder in Cleartrip.
SAP Concur, Newquest, DAG Ventures, Gund Investment and the Indian conglomerate Mahindra Group are the other major investors in Cleartrip.
As for its preferences for listing – whether it will go for an India listing or overseas listing or both - Agarwal said based on the company’s corporate governance and set up, Cleartrip will have the flexibility to tap any market which calls for the highest standards for listing.
In terms of how we are set up, we have always had blue chip, global investors and the company have been audited by one of the Big 4 from day one, he said.
“When the time comes, we will be guided by our advisors on which market makes sense”.
On the plans to raise funds from the Middle East-based investors, Agarwal said the company is not actively fund raising (now) but ‘we are always in conversations with investors, including investors from the ME region.
“From an investor, we look at not just who can bring capital but those who can add further value and have good relationship in the region that can help us with our strategy of investing in the region.
“The ME market is unique, some of these relationships matter a lot to be able to grow in these markets. In a nutshell we look for help beyond capital,” Agarwal said.For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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