EaseMyTrip Board Approves Issuance Of Bonus Shares, Stock Split

The board of directors of listed traveltech startup EaseMyTrip approved the issuance of bonus shares in the ratio of 3:1 and a stock split on Monday (October 10).

In an exchange filing, the startup said that its board approved the sub-division of each existing equity share of the face value of INR 2 into two equity shares of the face value of INR 1.

Besides, the board also approved the issuance of bonus shares in the ratio of 3:1, that is, the issuance of three bonus shares for each fully paid-up equity share of the company.

The bonus shares would be issued out of the free reserves created out of the profit of the startup as of March 31, 2022, the filing said. 

EaseMyTrip said that free reserves of INR 130.37 Cr would be required for implementing the bonus issue and it had free reserves of INR 196.31 Cr as of March 31, 2022.

EaseMyTrip estimated that the bonus shares would be credited by December 8, 2022.

A stock split increases the number of shares of a company in the specified ratio, leading to higher liquidity in the stock. On the other hand, bonus shares are issued by a company based on the existing number of shares being held by shareholders.

Explaining the rationale behind the stock split and issuance of bonus shares, EaseMyTrip noted in the filing that the company has grown over the years. With the increase in share prices, the startup said it would become harder for small potential shareholders to take part in the company’s future.

“Keeping with the spirit of inclusion and in order to reward the shareholders, the board of directors at its meeting held today approved and recommended the said corporate actions,” it said.

The traveltech startup’s board also approved an increase in its authorised share capital to INR 200 Cr from INR 75 Cr to accommodate the bonus shares.

All the decisions taken by the board would be subject to the approval of the company’s shareholders, the filing said.

Shares of EaseMyTrip gave up most of the gains they made earlier in the day and ended 1.12% higher at INR 406.70 on the BSE on Monday (October 10). The company’s share price has nearly doubled from the listing price of INR 206 in March 2021.

With this announcement, the traveltech startup has become the second listed startup to announce the issuance of bonus shares. Last week, beauty ecommerce platform Nykaa announced the issuance of bonus shares in the ratio of 5:1.

EaseMyTrip is one of the few listed startups to be profitable, despite never raising any equity funding till its IPO. In Q1 FY23, it recorded a profit of INR 33.7 Cr, more than double from Q1 FY22. 

During the same quarter, EaseMyTrip’s adjusted revenue reached INR 131.5 Cr, up 169% compared to the corresponding quarter of last year. The startup reported a 4X increase in Gross Booking Revenue to INR 1,663.1 Cr.

Founded in 2008 by Nishant Pitti, Rikant Pitti and Prashant Pitti, EaseMyTrip is a traveltech startup that helps customers book air, rail and bus tickets. The startup also offers hotel booking and holiday packages along with other travel services.