Short Seller Morpheus Accuses MakeMyTrip Of Anti-Competitive Practices, Profit Inflation

Morpheus Research, an activist short-seller, has accused online travel aggregator (OTA) MakeMyTrip of engaging in anti-competitive practices, using “accounting tricks” to inflate its profits, and failing to protect customers from unsafe and “bad actor” hotels.

Morpheus Research, which holds short positions in MakeMyTrip, said it spoke with over 100 industry insiders, including former employees, hotel chain managers, and executives at rival platforms for its research report.

MakeMyTrip declined to comment on Inc42’s queries, saying it does not respond to short-seller reports.

Notably, in 2022, India’s antitrust regulator Competition Commission of India (CCI) slapped a fine of about $26 Mn on MakeMyTrip for anti-competitive behaviour. It said MakeMyTrip imposed price parity on hotel partners – a clause that bars hotels from offering their rooms at lower prices or on better terms on their own websites or on other platforms. 

The regulator asked the OTA to stop this practice, however, Morpheus said MakeMyTrip continues to engage in such practices. Former MakeMyTrip employees told the shortseller that price parity checks are carried out daily, with hotels given a “parity score”. It said management of two mid-sized hotel chains confirmed that the clause is still in their contracts.

The report also claimed that MakeMyTrip quietly removes hotels from its search results if they list cheaper prices elsewhere or refuse to deal exclusively with the platform. Separately, Morpheus said it found evidence of a new, undisclosed investigation by the CCI into whether MakeMyTrip’s pricing agreements amount to cartel-like behaviour. 

Aggressive Accounting Charge

Morpheus accused MakeMyTrip of padding its profits using aggressive accounting. The report said MakeMyTrip has not set aside any money for the 90% of the fine it will have to pay if its petition against the 2022 CCI penalty gets a negative outcome. Along with interest, the report said the amount could be as high as $34 Mn, equivalent to roughly 60% of its 2025 net income.

MakeMyTrip still has a $20 Mn receivable from defunct Go First. The research report said that while MakeMyTrip’s competitors have written off their exposure entirely, the OTA has only provisioned half of it. 

Morpheus also said that the Nasdaq-listed company reports “adjusted” metrics that inflate its results compared to IFRS figures. It said the company uses a metric called “adjusted margin” that adds back customer acquisition costs. This made its air ticketing segment appear to be growing when, under standard accounting rules, revenue fell 2% and margins shrank. 

Since 2021, the gap between MakeMyTrip’s adjusted profits and its actual reported profits has been $212 Mn. In the most recent quarter, a reported profit of $7.2 Mn became $51 Mn after adjustments, a multiple far higher than at peers like Booking Holdings or Expedia, the report added.

The company raised $1.4 Bn via convertible notes in 2025 to buy out strategic Trip.com’s stake. The conversion price is three times the current share price, meaning investors are unlikely to convert. They can instead force MakeMyTrip to repurchase the notes in 2028, creating a potential $1.4 Bn cash obligation at a time when the company holds $830 Mn in cash, Morpheus said.

Losing Ground While Claiming Dominance

In July 2025, MakeMyTrip CEO Rajesh Magow said the company only “theoretically” faces competition and that there is “no real other OTA player” in India.

However, Morpheus disputed this claim. Citing former MakeMyTrip executives, the report said the company was “blindsided” by Booking.com and its subsidiary Agoda, which have been aggressively cutting prices to gain share. Hotel commissions have reportedly dropped from around 35% to as low as 18%.

MakeMyTrip’s share of bookings at Marriott hotels in India has fallen from 38% in 2022 to 31% today, while Booking.com’s market share has increased to 36-38%, an industry consultant was cited as saying. An OYO executive told the shortseller Agoda’s business with the company grew 200-300% over the past two years, while MakeMyTrip and Goibibo together lost around 10-12%.

Morpheus also said the MakeMyTrip is seeing high competition from other players like ClearTrip. Besides, MakeMyTrip’s strategic backer Trip.com, which reduced its stake in the company from 45% to 17% in 2025, is now hiring in India for direct market expansion. Trip.com’s co-founder filed to sell MakeMyTrip shares worth $3 Mn in February 2026.

Unsafe Hotels & Dark Patterns 

Morpheus said it analysed reviews of 3,679 budget hotels across Bengaluru, Delhi, and Mumbai. It found around 332 properties where customers reported extortion at check-in, women’s safety concerns, or other serious issues. However, most of these hotels continue to remain listed on MakeMyTrip.

In one case, a couple discovered a hidden camera in a flower vase in their hotel room. When they reported it to MakeMyTrip, the platform offered a 25% refund. 

A former MakeMyTrip business development manager told the shortseller, “We basically try to say to them that you shouldn’t be doing it again and again, but we actually don’t do it (ban them).”

Morpheus also found several hotels listed on MakeMyTrip in Goa that could not provide a registration number, which state law requires. Hotel association members told the firm that many unlicensed hotels remain on the platform.

On dark patterns, the report said that despite MakeMyTrip publicly declaring its platform free of such practices in November 2025, it found several instances of them. 

The report cited several such examples – a convenience fee of around $27 that only appears on the final checkout page, WhatsApp messages sent after booking claiming that travel insurance is “mandatory” when it is not, a message falsely telling users a cab has already been booked for them on arrival, and a train ticket add-on called “Alternate Trip” that promises a “3x refund” but contains restrictions that, in most cases, make it nearly worthless.

A former MakeMyTrip engineer told the firm, “In the codebase, you will find dark patterns. MMT has not been caught yet.” 

The allegations come at a time when MakeMyTrip is also looking to list on Indian exchanges. Earlier this month, the Nasdaq-listed company said it is evaluating a potential listing in the Indian bourses to open up an access to capital from domestic institutional and retail investors. 

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