There are some interesting IPOs scheduled to be launched in 2021. One such IPO is the Ease My Trip IPO that is being launched on March 03, 2021. Here is all you need to know about the issue:
|March 08, 2021 to March 10, 2021
|Book Built Issue IPO
|Equity Shares of Rs.2 totaling up to Rs.510 Crore
|Offer for Sale
|Equity Shares of Rs.2 totaling up to Rs.510 Crore
|Rs.2 per equity share
|Rs.186 to Rs.187 per equity share
|Min Order Quantity
|Bid/Offer Launch date
|March 08, 2021
|Bid/Offer Last date
|March 10, 2021
|Basis of Allotment finalization date
|March 16, 2021
|Initiation of Refunds
|March 17, 2021
|Credit of Shares to Demat Acct
|March 18, 2021
|IPO Shares Listing Date
|March 19, 2021
Easy Trip Planners Limited is an online travel agency in India. In the nine months ended December 2020, it was ranked second in terms of booking volume and third in terms of gross booking revenues in the country. The company offers a wide range of travel-related products and services including (but not limited to) flight tickets, train tickets, holiday packages, hotel booking, bus tickets, cab booking services, visa services, etc.
Easy Trip Planners have managed to develop a significant market share in the country due to the quality of its services, user-friendly websites, mobile applications (Android and iOS), customer-centric approach, and effective marketing programs. The company has a dedicated in-house technology team focused on developing a secure, advanced, and scalable technology infrastructure and software.
Easy Trip Planners Limited started operations in 2008 as a B2B2C (business to business to customer) distribution channel to provide travel agents access to its website to book domestic travel airline tickets to cater to the offline travel market in India. In 2011, the company entered the B2C segment by focusing on the growing travel requirements of the country’s middle-class population. The following year it introduced international flight bookings on its website. By 2013, the company had forayed into the B2E (business to enterprise) segment to provide travel solutions to corporates and introduced hotel bookings and holiday packages to its customers.
By 2014, the revenue of the company had crossed USD 150 million and launched the Android application. By 2018, the company had introduced travel insurance and started collaborating with IRCTC for train tickets.
Here is a quick look at the financial performance of Easy Trip Planners Limited over the last three years:
|Profit After Tax
All amounts in INR Crore
A quick glance at the financial performance of Easy Trip Planners over the last three years highlights significant growth. During this period, the total income of the company showed growth at a CAGR of 25.80%. Further, between 2018 and 2020, the profit after tax grew at a staggering CAGR of 128.96%. Also, the company’s total assets grew at a CAGR of 25.14%.
While the travel and tourism sector was adversely impacted due to the COVID-19 pandemic, the Indian travel industry is expected to grow at a CAGR of 2% from Fiscal 2020 to Fiscal 2023. As people have slowly started resuming air travel, the air ticketing segment is expected to grow at a CAGR of 1.5% by Fiscal 2023. Overall, the Indian online ticketing segment is expected to grow at a CAGR of 3% to 4% from 2020 to 2023. While the increased penetration of the internet and smartphones is expected to continue aiding the growth of the segment, the impact of the pandemic might take some time to wear off.
In India, the online ticketing segment can be divided into the following sub-segments:
The Indian Online Travel Agency Industry is expected to grow at a CAGR of 1% to 2% between 2020 and 2023 in terms of gross booking revenues. If you look at the net revenue, the expectation is a CAGR of 0% to 2% for the same period.
According to the Red Herring Prospectus, there are no listed companies that have a business portfolio comparable with that of Easy Trip Planners. Hence, it is not possible to provide any industry comparison.
Since there are no peers to compare the valuation of the EasyMyTrip IPO with the peer benchmark, investors will need to look at the intrinsic value of the company and compare it with its proposed share price.
We will use the intrinsic value formula provided by the founder of value investing – Benjamin Graham:
Intrinsic Value = Current Earnings x (8.5 + [2 x expected annual growth rate])
In FY 2020, EasyMyTrip booked profits of Rs.34.65 crores. Also, let’s take the estimated annual growth rate at 2% (based on the estimated growth rate of the precision engineering industry for 2020-2023). Therefore,
Intrinsic Value of Easy Trip Planners = 34.65 x (8.5 + [2 x 2]) = Rs.433.125 crores
Even if we deduct a margin of safety of 10%, the intrinsic value of Easy Trip Planners = Rs.389.81 crores
As per the IPO structure, the company has a market cap of Rs.2034 crores.
Easy Trip Planners Limited intends to achieve the benefits of listing the equity shares of the company on stock exchanges like enhancing the visibility of the brand and providing liquidity to its existing shareholders.
You can apply for the Ease My Trip IPO by using one of these two methods of payment:
Here are some things that you need to keep in mind before investing in the Easy Trip Planners IPO:
The Ease My Trip IPO is a Main Board IPO for the issue of equity shares having the face value of Rs.2 totaling up to Rs.510 crores. The registrar for the IPO is KFintech Private Limited and the shares are proposed to be listed on the BSE and NSE.
The Ease My Trip IPO opens on March 08, 2021, and closes on March 10, 2021.
The lot size of the Easy Trip Planners IPO is 80 shares. Also, the minimum order quantity is 80 shares.
According to the RHP, the basis of allotment will be finalized by March 16, 2021. Further, investors can expect to receive the credits in their demat accounts by March 18, 2021.