Easy Trip Planners initial public providing (IPO) will open for subscription on Monday, creating it the tenth public concern to enter Dalal Street so far in 2021. The on the net travel agency is searching to raise Rs 510 crore via the IPO which will totally be an Offer For Sale (OFS) by current shareholders. Post concern, the promoter shareholding will come down to 74.9% from one hundred% pre-IPO and public shareholding will enhance to 25.1% from zero. The concern will stay open for subscription till March 10.
About the concern
Investors can subscribe to Easy Trip Planners IPO in the value band of Rs 186-187 per share, in a bid lot of 80 shares and multiples thereafter. This translates to a minimum investment of Rs 14,960 per lot. Through the concern, 2.73 crore shares of the corporation will be on offer you. Of the total concern, 75% is reserved for Qualified Institutional Buyers (QIB), 15% for NIIs and only 10% for retail investors. The objective of the concern is to list the corporation on the bourses and provide liquidity for the current investors. Easy Trip Planners will not be acquiring any funds raised via the IPO course of action.
Ahead of the IPO, Easy Trip has currently raised Rs 229 crore anchor investors, allotting them 1.2 crore equity shares at Rs 187 apiece. Data offered on BSE shows that amongst marquee international investors, Nomura Funds Ireland Public Limited and HSBC Global Investment are amongst the 35 anchor investors of the firm. Tata Trustee Company, Aditya Birla Sunlife Insurance Company, Sundaram Mutual Fund, Bajaj Allianz Life Insurance Company and Nippon Life India Trustee Company have also invested via the Anchor Book portion.
Strong Financials
The corporation could lure investors in with its healthier monetary track record. Easy Trip Planners has been regularly lucrative more than the previous 3 years, with its profit developing from Rs 7crore in the fiscal year 2018 to Rs 35 crore in the earlier monetary year. The gross booking income of the firm comes 98% from airline tickets and 1% every single from Hotel & vacation packages, and other sources. In terms of income from contracts with buyers, 94% of the income was from air passage, 5% from hotel packages, and 1% from other services.
“On the back of rapid growth in the travel & tourism sector over FY17-20, the company has reported a consistent track record of business growth. But there is huge volatility in the profitability,” mentioned Choice Broking a note. However, analysts at Geojit Financial Services highlighted that the corporation remains the leading choose for buyers to return to with a repeat transaction price of ~85.7% in the earlier monetary year.
Hit by the pandemic, Easy Trip Planners reported a 56.3% and 61.6% on-year drop in the gross booking volume and revenues. However, in the very first nine months of the existing fiscal year, Easy Trump has managed to report a net profit of Rs 31 crore.
Key dangers connected with the firm consist of its higher dependence on airline ticketing organization from a compact quantity of airlines and competitors from other established and emerging players in the travel sector, according to Geojit Financial Services. Choice Broking, on the other hand, sees subdued macroeconomic atmosphere and unfavourable organization-mix as dangers along with the above-talked about ones.
Valuation and rating
Choice Broking mentioned that at the greater value band of Rs. 187, Easy Trip is demanding a P/E numerous of 58.6x. Though raising doubts more than its monetary functionality at the operating levels, the brokerage firm feels that the corporation has benefits like a scalable organization model, organization development in excess of the sector, money generation capability and therefore assign a ‘Subscribe’ rating to the corporation. Geojit Financial Services also a ‘Subscribe’ rating, valuing it at a P/E of 49x (annualized basis on FY21E EPS of Rs.3.8) which they mentioned tends to make the IPO pretty priced.