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News came in on Monday evening that co-founder Nishant Pitti, one of the promoters, plans to exit the company by selling the remaining 14% stake via block deals. However, only 1.2% of that stake has been sold so far, based on data last checked.
At the time of its IPO, the shareholding in EaseMyTrip was divided among Nishant, Prashant and Rikant Pitti. Nishant and Rikant had majority of the shares while Prashant had a negligible stake.
Post its IPO in March 2021, Nishant and Rikant Pitti were down to 37%, while Prashant’s stake remained constant.
By June 2022, both Nishant and Rikant gave 5% each of their stake to Prashant, taking his total shareholding to 10.5%.
As of December last year, more than 65% of Nishant Pitti’s 28.7% holding was locked-up. Come march this year, that was over.
Then came the selling.
In September this year, Nishant Pitti sold 14% stake in a block deal, in what was an earlier plan to sell only 8%. That fetched him a cool ₹920 crore.
Pitti may have halved his stake but who bought it? Did institutions buy? Not really. Institutional shareholding in easy trip is nearly down to 0.
What started off at over 6% at the time of its listing three years ago, domestic mutual funds now have only 0.2% stake in the company.
So who has the stock gone to? No prizes for guessing here – retail.
Similar to domestic funds, retail shareholding too stood at 6% in march 2021. Come December this year, that stake has gone up to almost 34%. So retail investors technically own 1/3rd of the company.
In absolute terms, there were 50,000 retail investors in EaseMyTrip during its IPO. That number has gone up to 9.9 lakh by December this year. In January this year, easy trip had suspended bookings to Maldives following a diplomatic row, a move later reversed in October. However, during this period, the number of retail shareholders in the stock has doubled.
EaseMyTrip has issued multiple bonus shares carrot to keep the retail flock interested. It announced a bonus in February 2022, another one in November 2022, which is when it also announced a stock split, and another bonus issue came as early as October this year.
But have financials matched up to this? Not quiet. Net profit at the end of financial year 2022 stood at ₹24 crore. But that number is still at ₹26 crore, after making a peak of close to ₹50 crore.
EaseMyTrip has also been in the news for its interests other than its core business. Earlier this year, Nishant Pitti along with SpiceJet chairman Ajay Singh submitted a ₹1,600 crore bid for the now defunct go air. Pitti withdrew from the bid in his personal capacity in may this year, saying he wanted to focus on the long-term vision of his company.
The company also announced plans in September to foray into manufacturing electric vehicles. A travel company making EVs would have left many question marks. But the kind of market we were in back then, the stock went up 11% post the announcement, only to fall 6% the next day.
So what next for ease my trip? To be fair, there are multiple questions that need to be asked.
- Will Nishant Pitti be able to sell his remaining stake?
- Two, if he manages to do, will other promoters follow suit?
- Will retail continue to pile into the stock on the lure of bonus shares?
- And lastly, all eyes will be on the December shareholding pattern that should be up anytime next month.
It has been four years since easy trip went public. It has had its moments, both good and bad. But the trip ahead, is anything, but easy.
