Easy Trip IPO subscribed 2.3 times on Day-1, issue closes Wednesday

On Friday, the company allotted shares worth Rs 229 cr, or 45% of the total issue size to anchor investors

The IPO of Easy Trip Planners, the company that operates online travel portal easemytrip.com, was subscribed over 2.3 times on Monday, the first day of the issue. On Friday, the company allotted Rs 229 crore worth of shares–45 per cent of the total issue size of Rs 510-crore to anchor investors.

HSBC, Nomura, Aditya Birla Sunlife Insurance, Sundaram MF and Bajaj Allianz Life Insurance were some of the investors allotted shares.

Easy Trip has set a price band of Rs 186-187 per share. The IPO is entirely an offer for sale by promoters Nishant Pitti and Rikant Pittie, who will offload shares worth Rs 255 crore each. Retail investors portion for the IPO is only 10 per cent as against typical 35 per cent for other IPOs.

At the upper end of the price band, the company will have a market cap of Rs 2,030 crore. Easy Trip offers services such as airline tickets, hotel bookings and holiday packages.

Easy Trip offering is one of the few from India’s fledgling e-commerce space and the travel industry, which was badly bruised by the covid-19 pandemic.

“Considering the stringent lockdowns last year, EaseMyTrip was the least impacted among its peers and it has already recovered 70 per cent in terms of booking volumes as of Q3FY21 compared to Makemytrip’s 46 per cent and Yatra’s 44 per cent. However, it faces certain risks such as the commercial lawsuit by MakeMy Trip for its brand name, re-lockdowns if Covid-19 intensifies and premium valuation of 61.5x P/E. Being debt free with a strong ROE and ROCE of over 35 per cent does make EaseMy Trip a good listing gains candidate but investors must be careful given the frothy nature of markets and the industry risks the travel industry entails given the current situation,”said Nirali Shah, Head of Equity Research, Samco Securities.

The company’s easemytrip portal has gain popularity thanks to its unique business model where it gives the no-convenience fee option to customers not opting for any other promotion.

“It is the only player among the key online travel agencies (OTA) in India which has been consistently earning profits. Being 100 per cent bootstrapped, cost efficiency is in the DNA of the company and that has enabled them to manage profitability better than peers. At the higher price band of Rs 187 per share, Easy Trip Planners is valued at 25.5 times its estimated FY23 earnings. We recommend a subscribe,” said broking firm Ventura in a note.

Easy Trip’s IPO closes on Wednesday.