The Delhi-headquartered firm has engaged Axis Capital and JM Financial as merchant bankers for its proposed initial public offering (IPO), sources said
EaseMyTrip.com is close to becoming the first online travel aggregator to list on the domestic bourses, sources told Moneycontrol.
The Delhi-headquartered firm has engaged Axis Capital and JM Financial as merchant bankers for its proposed initial public offering (IPO), sources said.
"The company is likely to raise between Rs 500 crore and Rs 750 crore via the IPO, though a final call on the issue size has not been taken. The DRHP (draft red herring prospectus) will be filed in June,” a source said.
EaseMyTrip was founded in May 2008 by the Pitti brothers (Nishant and Rikant Pitti). It provides air tickets, hotel bookings, bus bookings, holiday packages and white label services and has overseas branches in Dubai, Bangkok, Maldives and Singapore.
"It will be a mix of fresh issue and sale by existing shareholders,” another source said, adding the promoters had ambitious plans to strengthen their position in the fiercely competitive online travel segment.
Nasdaq-listed MakeMyTrip, which merged with the Ibibo group, is the market leader in this category. Cleartrip, Yatra, ixigo, Booking.com and Expedia are some of EaseMyTrip's domestic and global rivals.
"Since this is potentially the first IPO by an online travel portal, advisors are likely to compare the financial performance, products and offerings of EaseMyTrip with global peers and also related unlisted Indian peers," a third individual familiar with the company’s IPO plans said.
"Customer experience and ease of navigation are most critical in the online travel segment to ensure (user) stickiness. An additional significant factor is to aggregate as large a network as possible. Low or nil service fees and ease of cancellation bring customer delight. The new generation of investors, which are tech-savvy, see a lot of value and growth in these businesses," said Prithvi Haldea, Founder and Chairman, Prime Database.
Moneycontrol is awaiting email responses to its queries sent to EaseMyTrip, Axis Capital and JM Financial and will update this article as soon as it hears from them.
According to its website, EaseMyTrip has 7.5 million direct consumers, a B2B network of 42,000 travel agents, 1,200 franchise outlets, 1,600 distributors and 640 white label solutions. It has grown steadily without any external support or venture capitalist funding. A Moneycontrol report dated April 13, 2018 said it had clocked a turnover of Rs 2,400 crore in FY18.
According to a recent report, quoting CEO Nishant Pitti, nearly 95 percent of the site's business comes from the airlines segment and the management plans to increase its share of holiday packages and other businesses to 20 percent by 2020. The firm also has a presence in the entertainment industry and has produced Bollywood films.According to a joint study by KPMG and FICCI, online sale of travel bookings in India is expected to increase at a healthy 14.8 percent (CAGR) to $38.7 billion by 2021 from $22.3 billion in 2017. An EY report said domestic companies raised about Rs 6,482 crore through 14 IPOs (main market + SME market) in the first quarter of 2019, reflecting a sharp drop (66 percent) when compared to the same period last year.