EaseMyTrip IPO of Rs 510 crores is going to hit the market on March 8, 2021. Ahead of the offer, let’s look at the details to decide if it is worth bidding.
Easy Trip Planners Limited is an online travel agency based in Delhi. The promoters, Nishant and Rikant Pitti, will offload a 25 percent stake through the IPO. Between April and December 2020, EaseMyTrip ranked second in terms of booking volume and third in terms of gross booking revenue. It is also second in terms of gross revenue earning. The company offers a wide range of travel-related services from flight ticketing, hotel booking, holiday packages, train and bus tickets, cab booking services, visa processing services and more. The firm has a dedicated technology team to undertake digital development to enhance its services and user experience. Digital innovation and a lean business model have helped the company make a strong impact in the competitive segment of online travel, where it has peers like MakeMyTrip and Yatra.
Now let’s take a glance at the financials of the company.
Starting in 2008, EaseMyTrip crossed the USD 150 million revenue mark in 2014. The company registered steady growth in profit in the last three financial years. In March 2020, the company’s profit after tax (PAT) was Rs 34.65 crores, and between April and December 2020, in the nine months, PAT was Rs 31.11 crores. If we consider the growth rate of the last three years, the company grew at a CAGR of 25.80 percent, PAT grew by CAGR of 128.96 percent, and asset by CAGR of 25.14 percent.
The travel industry got severely impacted by the outbreak of COVID-19. The global travel industry slumped due to travel restrictions imposed by several governments. Amid the situation, the Indian travel industry is expected to grow by 2 percent between 2020-23. As people have started to travel again, the air ticketing segment will grow at a CAGR of 1.5 percent by Fiscal 2023. Indian ticketing system may register a CAGR of 3-4 percent between 2020 and 2023.
The industry hopes to manage a CAGR of 1-2 percent in gross booking revenue-earning during the next four years, and net revenue is also likely to grow around a CAGR of 2 percent during the same period.
- A leading player in the online travel agent segment with a customer-focused business approach. EaseMyTrip is a well-recognised brand
- Strong distribution channels, B2B2C, B2C, and B2E, to cater to a broader customer base
- Consistent track record in financials and operational performance
- A dedicated in-house development team focused on creating scalable infrastructure to enhance service and user experience
- The lowest marketing and sales expenses as a percentage of its gross booking revenue in 2020 per a CRISIL report
- Experienced management and team
About EaseMyTrip IPO Offer
- The issuer has setthe EaseMyTrip share price at the Rs 186-187 price band. According to experts, it is reasonably priced based on the financials and intrinsic value of the company.
- Ahead of the IPO launch, the share prices of EaseMyTrip soared in the grey market, where it surged Rs 166-170, trading currently at a 90 percent premium.
Always complete due diligence before subscribing to an IPO. Invest only in industries that you understand or confident about their growth in the future. Hope the information shared helps you make an informed decision.
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