SUMMARY
Qualified institutional buyers (QIB) bid 77.53 times more than their reserved share, the portion for retail investors was subscribed 70.40 times while the portion set aside for non-institutional investors was subscribed 382.21 times
The IPO went live on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), just as the travel and hospitality industry is poised for a comeback
The issue is priced in the band of INR INR 186-187 per share and is entirely an offer for sale (OFS) by the promoters Nishant Pitti and Rikant Pitti
The INR 510 Cr initial public offering (IPO) of the online travel portal EaseMyTrip was subscribed 159.33 times by the end of its final day i.e. March 10, 2021. The IPO opened on March 8.
For the over 1.5 Cr shares on offer, the IPO received bids for 240.27 Cr equity shares, the subscription data available on exchanges showed.
Qualified Institutional Buyers (QIB) bid 78 times more than their reserved share, the portion for retail investors was subscribed 70.40 times while the portion set aside for non-institutional investors was subscribed 382.21 times.
The IPO went live on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), just as the travel and hospitality industry is poised for a strong comeback after the pandemic-induced lull through all of last year.
The issue is priced in the band of INR INR 186-187 per share and is entirely an offer for sale (OFS) by the promoters Nishant Pitti and Rikant Pitti, who are going to offload shares worth INR 255 Cr each through the public issue. Post offer, they will hold 75% shareholding in the company. At the upper price band, the total issue size stands at INR 510 Cr. The company will not receive any proceeds from the IPO, since its main purpose is to enhance the brand’s visibility and provide liquidity to existing shareholders.
Founded in 2008 by Nishant Pitti and Rikant Pitti, EaseMyTrip allows its customers to book air, rail and bus tickets and hotel and holiday packages, besides other travel services. In the Indian market, EaseMyTrip competes with Yatra, MakeMyTrip and Cleartrip, among others.
Easy Trip (parent company of EaseMyTrip) had filed its draft papers for an IPO with the Securities and Exchange Board of India (SEBI) in December 2019. The issue is being managed by Axis Capital and JM Financial.
Notably, Easy Trip is the only major OTA (online travel aggregator) in India in terms of net profit margin. In the fiscal year ended March 31, 2020 (FY20), Easy Trip’s profit stood at INR 35 Cr. In its draft red herring prospectus (DRHP), the company wrote that due to the Covid-19 pandemic last year, its business and operations were adversely affected.
According to the IPO report of Easy Trip Planners Ltd, from the low of July 2020 when its domestic bookings were just 21% of the number of bookings in the same period in 2019, the company has steadily recovered its volumes. As of December 2020, the company’s domestic bookings were 76% of the same time in 2019. In the first nine months of the fiscal year 2020-21 (FY21) i.e. from April to December, the company’s revenue stood at INR 49.25 Cr, against expenses of INR 37.93 Cr.
By the end of FY20, Ease Trip had 9.65 Mn customers, less than its peers MakeMyTrip (46 Mn) and Yatra (11.1 Mn).
Both MakeMyTrip and Yatra reported an improved financial performance in the quarter ended December 31, 2020, compared to the previous quarter. However, the year-on-year (YoY) comparison of their financial performance in the December quarter revealed the adverse effect of the pandemic on the travel and hospitality sector.
For MakeMyTrip, the company recorded a revenue of INR 415.73 Cr, a 169% quarter-on-quarter (QoQ) growth, but a fall of 61.3% year-on-year (YoY) over revenue of INR 1075 Cr in the quarter ended December 31, 2019.
Similarly, Yatra recorded a revenue of INR 60.75 Cr in the December quarter, a growth of 60.6% QoQ but a fall of nearly 62% year-on-year (YoY).
While the pandemic impacted businesses across sectors, the impact was particularly severe on the travel industry. In India, there was a hard lockdown from late-March to late-May, which hit aviation companies and online ticketing companies.
Restrictions on interstate travel continued to be placed well until December last year. Online travel companies were forced to scale down their activities and lay off huge chunks of their workforce.
Besides EaseMyTrip, several Indian Indian startups such as Zomato, Flipkart. PolicyBazaar, Grofers and Delhivery will in all likelihood go for a public listing this year.
