Easy Trip Planners Ltd., the Indian travel search engine that postponed its initial public offering from last year to finally make its stock market debut earlier this month, couldn’t have timed things much worse.
Instead of domestic and international travel rebounding by now as hoped, an aggressive wave of coronavirus cases in the South Asian nation has sparked night-time curfews and fresh lockdowns in parts of the country. India’s vaccine roll out has also been slow — at this rate, it will take 2.4 years to cover 75% of the population with a two-dose jab — prolonging the recovery for airlines and tourism.
Still, Easy Trip Director Prashant Pitti is sanguine, even though his company, which operates EaseMyTrip.com, gets more than 90% of its revenue from selling airline tickets.
“Since the IPO, Covid cases have started going up, that’s unfortunate, we didn’t foresee it,” said Pitti, who founded Easy Trip in 2008 with his brothers Nishant, who is CEO, and Rikant, another director. Although the online travel market in India is crowded, the company is growing, with travelers attracted by its policy of not charging a service fee if other discounts aren’t being used in tandem, Pitti said.
“Because of this strategy, we’ve been able to grow through word of mouth. We spend very little money on marketing and discounts compared to our peers,” he said. EaseMyTrip, which gets commissions from airlines and is profitable, also sells hotel rooms, holiday packages and rail and bus tickets.
The Delhi-based group, whose IPO raised 5.1 billion rupees ($70 million) with the majority of that going to Nishant and Rikant as they sold down their interests, has however been hit by cancellations as people scrap their travel plans.
The coronavirus outbreak “materially and adversely” affected cash flows and disrupted revenue, the company said in its preliminary prospectus. Gross booking revenue fell to 12.2 billion rupees in the nine months through December versus 31.8 billion rupees the same period of 2019. Booking volumes more than halved.
Investors don’t seem too perturbed, with Easy Trip shares trading 9% above their 187-rupee issue price on Tuesday. Ventura Securities Ltd. said in a report earlier this month that the company’s strong finances should see it through these difficult times.
“Being bootstrapped, the management has tended to be extremely cost conscious,” Ventura said. “Their primary driver is that they do not charge a convenience fee and this is what sets them apart from their peers like Make My Trip, Yatra and Clear Trip. This strategy has paid off handsomely during the pandemic and has ensured they gained market share.”
EaseMyTrip is now the second-largest online travel agency in India, based on booking volumes, according to Ventura.
“We’re here for the long haul,” Pitti said. “We know if we continue to deliver consistently like we have for the past 13 years, our investors will be happy.”