Easy Trip Planners IPO: Issue Details highlighted by ICICI Securities
Easy Trip Planners IPO is an offer for sale of Equity Shares aggregating upto Rs 510 cr. Easy Trip Planners IPO to issue 27,419,354 – 27,272,727 shares at a face value of Rs 2. Price band of the IPO is Rs 186 – Rs 187 and the Bid lot is 80 Shares and in multiple thereof. Post Issue Implied Market Cap of Easy Trip Planners would be Rs 2021 – Rs 2032 cr.
Easy Trip Planners IPO is an offer for sale of Equity Shares aggregating upto Rs 510 cr. Easy Trip Planners IPO to issue 27,419,354 – 27,272,727 shares at a face value of Rs 2. Price band of the IPO is Rs 186 – Rs 187 and the Bid lot is 80 Shares and in multiple thereof. Post Issue Implied Market Cap of Easy Trip Planners would be Rs 2021 – Rs 2032 cr. Book Running Lead Manager of Easy Trip Planners IPO is Axis Capital, JM Financial and the Registrar is KFin Technologies. Easy Trip Planners Issue opens on Monday, 8 th Mar’2021 and closes on Wednesday 10 th Mar’2021.
Easy Trip Planners, an online travel agency, was founded in 2008. The company offers a comprehensive range of travel-related products and services for end-to-end travel solutions, including airline tickets, hotels and holiday packages, rail tickets, bus tickets and taxis as well as ancillary value added services such as travel insurance, visa processing and tickets for activities and attractions.
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Easy Trip Planners products and services are organised primarily in the following segments:
(i) airline tickets (94% of revenues)
(ii) hotels & holiday packages (5% of revenues)
(iii) other services (0.6% of revenue)
Huge opportunity in hotel, corporate, Tier II, Tier III cities for Easy Trip Planners:
Easy Trip Planners online penetration of hotels is expected to increase from 21-26% in FY20 to 29-31% in FY23E. Further, margins in the hotel & holiday packages business are higher compared to airline ticketing. Hence, in order to capture this, the company intends to focus on direct tie-ups with hotels & hotel suppliers and expand its presence in hotels outside India.
Further, Easy Trip Planners aims to utilise the services of traditional travel agents to tap corporates and Tier II & Tier III cities that are still utilising offline booking channels. Further, ICICI Securities believes that Easy Trip Planners strategy of providing an option of no-convenience fees to customers will further drive repeat customers and, in turn, revenues.
Easy Trip Planners lean, cost efficient operations:
Easy Trip Planners has developed a streamlined, efficient and lean organisation structure relative to the size of its business operations. Easy Trip Planners advanced technology infrastructure and operating systems focused on optimal human resource allocation, minimising operational & systemic errors and enhancing customer satisfaction have resulted in reducing person/personnel and administration costs while increasing employee productivity and improving operating efficiencies. Easy Trip Planners had the lowest number of employees among the key online travel agencies in India as of March 31, 2020. ICICI Securities believes this has enabled Easy Trip Planners to maintain healthy profitability in the past few years.
Easy Trip Planners Key risk & concerns:
Covid 19 has and could continue to have adverse impact on travel
Intense competition in online travel segment
Promoters have interest in ventures similar to company’s business
Easy Trip Planners priced at P/E of 61.5x FY20 PAT on upper band:
Taking cognisance of the huge growth opportunities for EaseMyTrip and a lean cost of operations that would aid flow of profitability to the bottomline, we recommend SUBSCRIBE rating to the issue. The company is available at a P/E of 61.5x on FY20 PAT.
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