A muted listing for Easy Trip Planners, what should investors do?


Analysts had expected a big-bang listing with a 50-80 percent premium over the issue price of Rs 187 a share but the share opened at Rs 206.

Sunil Shankar Matkar

March 19, 2021 / 02:42 PM IST

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Online travel platform Easy Trip Planners share opened at Rs 206 on March 19 and rallied to Rs 233.15, gaining 24 percent, disappointing analysts who had expected a big-bang listing with 50-80 percent premium over the issue price of Rs 187 a share.

Weak market conditions—the benchmark indices have corrected 4 percent in the previous five sessions due to rising US bond yields and COVID-19 infections in India—could be the reason for a muted listing.

At 1353 hours, the share was trading at Rs 203.35, up 8.74 percent over the issue price, on the BSE, while it was quoting 8.82 percent higher at Rs 203.50 on the NSE.

Experts say short-to-long term investors should hold the stock, given the growth potential in the business but those who invested for listing gains can book profits.

“Markets always reward a player which has high-growth potential and the muted listing of Easy Trip Planners is on the back of weakness in the secondary market due to pressure from US bond yields, trading at 14-month high. We advise that investors should hold on to Easy Trip for long-term,” Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.

Yash Gupta, Equity Research Associate at Angel Broking, said those who applied for listing gains should investors book profits. Short-term investors should hold for the next one-two years as he expects the company to do very well in the near future.

“Easy Trip Planners has very sound financials and even in the time of COVID-19, the company had been able to perform better than peers. Its business is almost back to pre-COVID levels as of December 2020 and a good point is that 97 percent of the companies revenue comes from flight bookings,” he said.

Easemytrip.com is ranked second among the key online travel agencies in India in terms of booking volumes in the nine months ended December 2020, and third on gross booking revenues in FY20.

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.

Astha Jain, senior research analyst at Hem Securities, also advised booking profits to those who invested for listing gains. It is the only profitable online travel agency with highest CAGR growth because of lean and cost efficient operations, she said.

“Also the fact that the company has been able to manage growth through internal accruals since inception depicts the strong management by promoters. The company’s Q3FY21 booking volumes represent 70 percent of booking volumes of Q3FY20 demonstrating robust recovery,” she said.

Buying on listing day and risk factor

Those who wish to buy the stock on the listing day should accumulate it in the Rs 195-205 range, Tapse said. Extended COVID-19 restriction on travel could have an adverse impact on earnings going forward, he said.

Long-term who didn’t receive any allotments investors can buy on the listing day, Gupta said . Easy Trip Planners raised Rs 510 crore through its public issue which was a complete offer for sale by promoters.

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