NEW DELHI / MUMBAI: Chinese online travel major Ctrip.com International has agreed to invest $180 million (Rs 1,204 crore) in India’s largest online travel company, Nasdaq-listed MakeMyTrip.com, the latest instance of Chinese strategic capital backing an Indian consumer internet venture.

The investment, which has been made via five-year convertible bonds, will, upon conversion, see Ctrip own about 15%-16% in Gurgaon-based MakeMyTrip.com.

Additionally, the Chinese company, which is backed by US travel website Priceline.com, is expected to pick up additional shares of MakeMyTrip in the open market that will see the $12.7 billion travel major own a 26.6% stake in the latter, and assume the position of its largest stakeholder, ahead of SAIF Partners, T Rowe Price, Tiger Global and founder and CEO Deep Kalra.

“We are delighted to have Ctrip invest in us. Ctrip is the dominant market leader in the online travel market in China. We believe there are many similarities in the Indian and Chinese online travel markets and we expect this strategic relationship between two market leaders to be mutually beneficial,” said Kalra in a company-issued statement. Investment banking major Morgan Stanley acted as the sole financial advisor to the transaction.

The deal is similar to the one made by Priceline in Ctrip in December, after it was reported that the US online travel services giant had agreed to pump in an additional $500 million, again through a convertible bond, along with an undisclosed “long-term equity investment firm.”

The investment also comes at an opportune time for MakeMyTrip, the country’s dominant online travel company, but whose share price took a hit last year, resulting in its market capitalization plunging from nearly $1 billion, to less than $500 million.

Shares of the company hit 52-week low of $11.97 in August last year, against a backdrop of increasing competition in its home market, as it continued to fight off Naspers-backed rival, GoIbibo in the high-margin hotels and travel packages space.

The company reported middling results for the quarter ended September 30, 2015. While revenue for the three months rose by about 3.2% to $62.5 million, losses widened to $12.2 million, or 29 cents per share on a diluted basis, up from $4.8 million or 11 cents per share on a diluted basis.

The share price of the company was trading up 28%, at $22, Thursday on Nasdaq, giving it a market capitalization of $695 million.

Proceeds will be used on further strengthening its market share in the Indian online travel market, especially through the mobile platform, MakeMyTrip said in its statement.

As per the official statement, on completion of the investment, Ctrip will acquire the right to appoint a director to the MakeMyTrip board of directors. That is expected to James Liang, the company’s co-founder and chief executive.

“Through this transaction, Ctrip has now gained exposure to India’s fast growing online travel market,” Liang said in the official statement.

This is the latest example of Chinese strategic capital backing an Indian venture over the last 12 months. Both, Chinese ecommerce giant Alibaba Group, along with its affiliate, Ant Financial, as well as Tencent have invested either committed or invested significant sums of money in the country’s consumer facing startups, such as online marketplace Snapdeal and medical search venture Practo.

More recently, Chinese ride-hailing group Didi Kuaidi confirmed that it had invested an undisclosed amount in its Indian counterpart, Ola.

“The investment by Ctrip into MakeMyTrip reiterates the interest of large Chinese companies to participate in the fast growing Indian internet story. The investment will allow MakeMyTrip to consolidate its position in the India travel space and more effectively compete with its more aggressive competitors who are flush with cash,” said Tarun Davda, managing director at Matrix Partners India which has backed online travel companies like Stayzilla, Treebo and WeAreHolidays.