Shares of Easy Trip Planners Ltd, the parent company of EaseMyTrip, are making headlines today as co-founder and promoter Nishant Pitti prepares to sell his remaining 14.21% stake in the company. This block deal, valued at approximately ₹780 crore, marks a significant event in the company’s journey. The move follows earlier stake sales by Pitti in 2023, and the transaction is set to attract participation from several institutional investors. The stock has seen considerable fluctuations in 2024, reflecting a mix of growth and challenges within the online travel industry.
About Easy Trip Planners: Business Model, Revenue Streams, and Founders’ Background
Easy Trip Planners Ltd, the parent company of EaseMyTrip, is a prominent player in India’s online travel industry. Established in 2008 by brothers Nishant and Rikant Pitti, the company has become a trusted platform for flight bookings, hotel reservations, holiday packages, and bus and train ticketing. With its customer-first approach, EaseMyTrip differentiates itself through a no-convenience fee model, which has garnered a loyal user base.
Revenue Model
The company generates revenue primarily through:
- Commissions: From airlines, hotels, and other travel service providers.
- Advertising Income: Leveraging its platform’s traffic for targeted advertisements.
- Service Fees: On select premium offerings.
Funding Background
EaseMyTrip went public in March 2021, raising ₹600 crore through an IPO. Since then, the company has consistently delivered shareholder value, despite occasional market volatility. Nishant Pitti’s role as a promoter has been instrumental in steering the company towards profitability and growth.
Services Offered
- Flight Bookings: Domestic and international air travel.
- Hotel Reservations: Partnerships with leading hotel chains.
- Holiday Packages: Customized tours for diverse traveler needs.
- Other Travel Solutions: Bus, train, and cab bookings.
Easy Trip Planners Block Deal Today: Stock in Focus as EaseMyTrip Promoter to Sell Entire Stake
The Block Deal in Detail
Nishant Pitti is reportedly selling his remaining 14.21% stake, equating to 5 crore shares, at an average price of ₹15.6 per share. This sale is estimated to fetch him ₹780 crore. Notably, this is not Pitti’s first divestment in 2023; earlier transactions included sales worth ₹920 crore in September.
Institutional Interest
The deal has attracted several institutional investors, including:
- CRAFT Emerging Market Fund PCC – Elite Capital Fund
- Multitude Growth Funds Limited
- Eminence Global Fund These participants highlight the market’s confidence in EaseMyTrip’s future prospects.
Background of the Stake Sale
In June 2023, Nishant Pitti sold 6.25 crore shares at an average price of ₹42.60 per share. This marked a pivotal shift in promoter holding, reflecting the strategic realignment of the company’s ownership structure. Over the course of the year, the combined promoter stake has reduced significantly, now standing at 48.97% after this transaction.
Stock Performance and Market Reactions
EaseMyTrip shares have faced a challenging year, declining by 17% in 2024 so far. However, the stock saw a brief recovery of 6.6% in the last five trading sessions leading up to the block deal. Despite short-term turbulence, long-term growth drivers remain intact, supported by the company’s diversification efforts into non-air travel segments and international markets.
Financial Performance in Q2 FY2024
- Profit Decline: A 45.16% drop in profit to ₹25.87 crore.
- Revenue Growth: Marginal rise of 2.1% to ₹144.67 crore.
- EBITDA Margin: Declined from 46.8% to 28.2% YoY.
- Non-Air Segments: Hotel bookings grew by 178.4% YoY, contributing significantly to Gross Booking Revenue (GBR).
- International Operations: Dubai operations reported a robust 371.3% growth in GBR.
Learning for Startups and Entrepreneurs
- Strategic Diversification: EaseMyTrip’s focus on non-air segments underscores the importance of diversifying revenue streams.
- Market Responsiveness: Adapting to market conditions, as demonstrated by promoter stake sales and institutional investor interest, is key.
- Customer-Centric Innovation: Offering value-driven services, such as no-convenience fees, helps build long-term loyalty.
- Transparency: Clear communication with stakeholders enhances trust during critical transitions.
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