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IPO Analysis: Easy Trip Planners

Ganesh V
/ Categories: Mindshare, IPO Analysis
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IPO Analysis: Easy Trip Planners

IPO rating- Invest for Listing gains

About the issue 

If you are missing investing in the IPO market, then soon, you are going to get a new option! On March 8, the online travel agency, Easy Trip Planners is going to launch its IPO. It may be listed on the stock market on March 19, 2021.  

The company is entering the capital market with its initial public offering (IPO) of equity shares of the face value of Rs 2 each. This will mark the tenth public offering of the year. The price band of the issue has been fixed at Rs 186 to Rs 187 per equity share. The opening date of the IPO is March 8, 2021, while its closing date is March 10, 2021. Up to 75 per cent of the portion of the net issue will be reserved for qualified institutional buyers (QIB) and not more than 15 per cent of the offering for non-institutional investors (NII). The remaining 10 per cent would be reserved for retail investors. A retail-individual investor can apply for up to 13 lots. The objective of the offer is to achieve share listing benefits and to sell equity shares, aggregating up to Rs 510 crore. 

Easy Trip Planners Ltd 

 

Issue open 

March 8, 2021 – March 10, 2021 

Issue type 

Book built issue IPO 

Issue size 

Equity shares of Rs 2 

(aggregating up to Rs 510 crore) 

Face value 

Rs 2 per equity share 

Issue price 

Rs 186-Rs 187 per equity share 

Market lot 

80 shares 

Min. order quantity 

80 shares 

Listing at 

BSE, NSE 

 

About the company 

Easy Trip Planners Ltd is the second-largest online travel agency in India in terms of gross revenue. The company offers a range of travel products & services along with end-to-end travel solutions including airline tickets, rail tickets, bus tickets, taxis, holiday packages, hotels, and other value-added services i.e., travel insurance, visa processing, etc. Easy Trip offers services via its website and Ease My Trip android and iOS mobile app. The company follows B2B2C, B2C, and B2E distribution channels to offer its services. Easy Trip Planners is the parent company EaseMyTrip. As of December 2020, it had 59,274 travel agents registered with the company across almost all major cities in India. As per the CRISIL report, it has the largest network of travel agents among key online travel agencies. Easy Trip Planners is known to avoid any hidden cost in its travel arrangements that can increase the fare prices for the customers to make it affordable and accessible. It also provides the option of a no-convenience fee, so that the customers are not required to pay any service fee where there is no discount or coupon. 

Strengths 

One of the leading online travel agencies in India with a customer-focussed approach, including the option of no-convenience fee with lean and cost-efficient operations. 

Strong brand name and distribution network. 

Consistent financial track record and operational performance. 

In-house advanced technology and analytics capabilities. 


Financials 

Easy Trip reported revenue worth Rs 81.46 crore for the nine-month ended December 2020, including other income worth Rs 32.19 crore. Its restated net profit stood at Rs 30.52 crore during the period. For the financial year ended March 2020, the company’s revenue stood at Rs 181 crore, including other income worth Rs 39.6 crore. Restated net profit was at Rs 32.98 crore. The company has been consistently profitable over the past three years, with its profit growing from Rs 3 lakh in 2018 to Rs 32.9 crore in 2020.  

Particulars (crore) 

20-Mar 

19-Mar 

18-Mar 

17-Mar 

Sales 

140 

101 

100 

102 

Employee Benefit Expenses 

30 

22 

16 

11 

Other expenses 

94 

84 

85 

65 

Operating Profit 

16 

-5 

-1 

26 

OPM (per cent) 

11.40 

-4.95 

-1.00 

25.49 

Other Income 

38 

50 

13 

Interest 

Depreciation 

0.4 

Profit before tax 

41 

41 

10 

27 

Net profit 

31 

23 

0.03 

20 

No. of shares 

10.86 

10.86 

10.86 

10.86 

EPS in Rs 

2.85 

2.21 

1.85 

 

Recommendation  

The company has been consistently profitable since incorporation, and it was the only profitable online travel agency among the key online travel agencies in India during FY18-FY20 in terms of net profit margin. Easy Trip Planners has entered into various agreements with third parties including airlines, GDS and API service providers, managers of channels, IRCTC, companies, and International Air Transport Association (IATA) for the conduct of commercial activities. Although it was the only profitable online travel agency among the top online travel agencies in India in the fiscal years 2018 to 2020; in terms of net profit margin, considering that the industry has been hit the hardest due to the pandemic, it is yet to recover to a large extent. Moreover, the near-term outlook also looks bleak. Due to the COVID-19 pandemic outbreak, its businesses, results of operation, financial positions, and cash flows were materially and adversely affected. Domestic and international travel restrictions imposed in India also disrupted its revenue lines. The company plans to expand in the B2B and B2C space, aiming to tap enterprises and travel agents directly. The operational expense for expanding this segment is expected to be marginal. Looking at the above positives, we believe that the company will keep growing its business at a healthy rate, and hence, you can invest for a listing gain. 

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