EaseMyTrip IPO Review

6 Mar 2021  Read 763 Views

In this seemingly blooming season of IPOs, companies from diverse industries are announcing their IPOs. And the next in this line is the second-largest online travel company of India. With a 90% premium in the grey market, EaseMyTrip is all set to make its stock market debut with its initial public offering. The subscription for the same will be opening on Mar 8 2021.

And before you think of getting in on this interesting company, it becomes crucial to know certain key facts about the issue. 

So let’s find out if EaseMyTrip IPO will be a good deal for you or not.

EaseMyTrip IPO – Details 

The company, which came into existence in 2008, has now grown to become one of the largest trip planning organisations in the country. The promoters of the same include Mr Nishant Pitti, Mr Rikant Pittie and Mr Prashant Pitti.

Key details of the issue 

IPO opening for subscription 

Mar 8, 2021

IPO last date for subscription 

Mar 10, 2021

Issue price 

Rs 186 – 187 

Issue size of the IPO 

510 crores 

Face value 

Rs. 2  per equity share

Issue type 

Book building issue

The company will be going in for a book building issue. The shares which will be carrying a face value of Rs. 2 per share is to be holding a price of Rs. 186 - 187 for each equity share. The last date for the subscription is Mar 10 2021. The listing of the shares is estimated to take place on Mar 19.

The ultimate aim behind the issue is to utilise the benefits associated with the listing. The company, as part of the issue, will be selling about 510 crores worth of shares to the public via the offer for sale. 

An individual retail investor can subscribe for a minimum of 1 lot containing 80 shares which will be amounting to Rs. 14,960. However, the maximum limit has been placed at 13 such lots containing a total of 1040 shares. The amount the investor would be requiring in the case of maximum allotment is Rs. 194,480.

Price details of the IPO 

Particulars 

Lots 

Total shares 

Total amount 

Minimum number of shares 

80 equity shares 

Rs. 14,960

Maximum number of shares 

13

1040 equity shares

Rs. 194,480

The allotment for the same will happen before Mar 16. And the stocks will be going live on both the stock exchanges NSE and BSE. Axis Capital Limited and JM Financial Consultants Private Limited will be acting as the lead book building managers.

So, should you go for it?

Now let us address the burning question- should you invest?

Easy Trip Planner Ltd aims at offering solutions to the travelling problems of customers and individuals. The company is experienced in extending a variety of products related to the travelling arena. This includes catering to generalised needs such as booking of travel tickets, train tickets and fulfilling the end to end or personal services such as taking care of your visa process, travel insurance and planning for your entire trip.

The company, which can be categorised as B2B2C, B2C and B2E based organisation, is associated with about 400 domestic and international airlines, about 50, 000 registered travel agents and 10 lakh+ hotels. Strong brand names with enhanced technology in the right place to serve the customers and end-users have always proved to be beneficial for them. 

Financials of EaseMyTrip

Financials of the last 3 years (in million)

Particulars 

March 2020

March 2019

March 2018

Assets 

2,823.37

2,430.88

1,802.89

Revenue 

1,797.24

1,511.11

1,135.74

Profit After Tax ( PAT) 

346.48

239.93

0.30

The company has been showing a sound financial performance in the last 3 years, which comes as a thumbs up to investors. Further, the compounded growth of the same stands at 25.50%. Their marketing and sales expenses are also low.

There are no listed peers as of now. However, the brilliant in-house technicians have ensured flexibility and convenience in the usage of their apps and website. Along with the efficient and brilliant managerial personnel in place, the company seems to be a good pick for anyone looking for an investment option

With a well-recognised brand name and a strong position in terms of market share, all happen to be cookie points for investors analysing the company’s profile. Though we are happy with the advantages of the investment, let’s understand the risks associated with the same.

EaseMyTrip has a handful of weak points which an investor must be well aware of to make a conscious choice. And they are as follows:

  • A huge portion of the company’s business comprises the sale of tickets such as flight and train tickets. The commission incurred from the same happens to make up a big part of their revenue. With that being said, any change in the expense or cost can leave back a huge impact on its bottom line.
  • With the pandemic still active and the future of the travel industry being a big question mark, not much can be predicted accurately when it comes to the future of the company’s balance sheets.
  • Also, excess dependency on a few travelling agencies might cost a lot if there are any disruptions caused. This might not only affect its revenue but affect its entire business in the short term.

To sum up 

If you look away from the handful of drawbacks associated with EaseMyTrip, it surely seems to be a decent buy. Further, a good welcome in the grey market and the possible listing gains are somethings that can be taken into consideration while making a decision.

About the Author: Varishika Dinesh | 100 Post(s)

Varishika is on the verge of successfully completing B.Com. Nothing excites her more than reading books and watching movies. Business, finance, economy? You have her attention.

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