TLI Staff
New Delhi: Even as Covid pandemic knocked out travel sector and uncertainty around its recovery continues, leading brokerages such as ICICI Direct and Ventura have given their thumbs up to initial public offering of online travel aggregator Easy Trip Planners Ltd (EaseMyTrip) advising investors to subscribe the issue.
The Indian travel industry is expected to reduce at a CAGR of 2% in FY20-23 due to pandemic-induced slowdown in the economy. Also, people prefer to only undertake essential travel and international flights remain limited.
The trading and investment service providers said that the company’s plan to aggressively expand its presence in hotel segments especially in tier-II and III towns and also tap corporates would pay off in the medium term.
Besides, the company strategy to ‘let go’ of convenience fee coupled with the strong customer connect should enable them to continue to gain market share and ensure sustenance of the high growth trajectory.
ICICI Direct in its report said that company’s strategy of providing an option of no-convenience fees to customers will further drive repeat customers and, in turn, revenues.
Taking cognizance of the huge growth opportunities for EaseMyTrip and a lean cost of operations that would aid flow of profitability to the bottom line, we recommend “subscribe” rating to the issue,” the brokerage said.
As per industry data, EaseMyTrip has increased its market share from 3.1% in FY18 to 4.6% in FY20 and has been ranked 2nd among key online travel agencies (OTAs) in India based on booking volumes for April-December period of FY21.
“It is the only player among the key online travel agencies (OTA) in India which has been consistently earning profits,” Ventura said.
It further said that the company being net debt free and cash flow positive, there are high chances that dividend distribution would be undertaken in the near term.
EaseMyTrip’s IPO is scheduled to open March 08, 2021. The bid/issue period will close on March 10. The price band of the issue has been fixed at Rs 186 to Rs 187 per equity share.