Investing.com - Macquarie upgraded MakeMyTrip (NASDAQ: MMYT ) to Outperform from Outperform on Tuesday, raising its price target to $110.00 as the travel company announced a significant share restructuring.

The online travel agency is raising $3.1 billion through a combination of primary share issuance and zero-coupon convertible notes. The company will issue 18.4 million shares at $90 per share and $1.43 billion in convertible notes due 2030 with a conversion price of $121.50, representing a 35% premium over the primary issue price.

MakeMyTrip will use the proceeds to repurchase a majority of Trip.com’s Class B shareholding, approximately 39.7 million shares. This transaction will reduce Trip.com’s ownership stake from 45.3% to approximately 17%, while decreasing its board representation from five seats to two out of ten.

Macquarie estimates MakeMyTrip’s basic share count will decrease by approximately 12% following the transaction, with a net reduction of 13.6-14.6 million shares. The firm projects a more modest 2-3% decline in diluted share count when accounting for the convertible notes at the $121.50 conversion price.

The research firm forecasts MakeMyTrip’s gross booking value could reach $16 billion by FY28, representing a three-year compound annual growth rate of 20% for Hotels-Bus and 15% for Air segments. Despite allocating 5% to sales, marketing and subsidies, Macquarie expects FY26E-28E free cash flow margin to remain around 20%, or approximately $275 million on average.

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