Shares of EaseMyTrip, a prominent travel aggregator owned by Easy Trip Planners, experienced a significant decline of 19%, hitting a low of ₹33.14 on the Bombay Stock Exchange (BSE). This sharp drop followed the announcement that promoter Nishant Pitti had sold a 2.7% stake in the company. The transaction, which raised concerns among investors, has highlighted the volatility surrounding the stock, leading to heightened scrutiny of the company’s future prospects.
Block Deal Details and Market Reaction
On September 24, sources disclosed that Pitti intended to offload up to 8.5% of his holdings through block deals, with the estimated value of these transactions around ₹622 crore. Such moves are not uncommon in the stock market, particularly when promoters seek to rebalance their stakes or raise capital for other ventures.
The block deals involved a substantial volume of shares, with 24.9 crore shares, representing approximately 14% of Easy Trip Planners’ total equity, changing hands at a price of ₹38 per share on September 25. Investors reacted quickly to this news, as shares of EaseMyTrip dipped further, reflecting market anxiety about the company’s stability and growth trajectory.
The indicative price for the share sale was set at ₹41.5 per share, which indicates that the shares were sold at a discount, further fueling concerns among investors. As of the end of the June quarter, Nishant Pitti held a significant 28.13% stake in Easy Trip Planners. The decision to sell such a portion of his holdings raised questions about the company’s financial health and future plans.
Despite the current turmoil, EasyMyTrip has been diversifying its business operations to explore new growth avenues. Recently, the company ventured into the medical tourism sector, which is a growing field that leverages India’s reputation for quality healthcare services at competitive prices. The company approved the acquisition of a 30% stake in Rollins International for ₹60 crore and a 49% stake in Pflege Home Healthcare Center for ₹30 crore. These strategic moves aim to tap into the burgeoning demand for medical tourism, allowing EasyMyTrip to broaden its service offerings beyond traditional travel arrangements.
Additionally, the company has announced plans to enter the electric vehicle (EV) manufacturing sector. Earlier this month, Easy Trip Planners revealed its intention to set up a wholly-owned subsidiary to produce electric buses, contingent on obtaining the necessary approvals from the Ministry of Corporate Affairs. This foray into the EV space aligns with global trends toward sustainable transportation and presents a unique opportunity for the company to innovate and diversify.
Future Outlook for Shares of EaseMyTrip
As of September 25, at 12:25 PM, shares of Easy Trip Planners had further declined, trading at ₹32.78 each, representing a 20.01% drop. The company’s co-founder, Prashant Pitti, stated last month that they would prioritize profit growth while focusing on expanding their offerings in non-air travel services and entering international markets. This commitment to growth is crucial in a competitive landscape where consumer preferences are constantly evolving.
Investors are keenly observing how the company navigates the challenges posed by recent market fluctuations and stakeholder actions. The ongoing developments in both the medical tourism and electric vehicle sectors could provide a cushion against potential volatility in the core travel business, particularly as the industry rebounds post-pandemic. However, skepticism remains regarding how these new initiatives will impact the overall financial performance of EasyMyTrip in the near term.
In summary, the recent block deal and subsequent decline in the shares of EaseMyTrip have raised several questions about the company’s strategic direction and market confidence. While the ventures into medical tourism and electric vehicle manufacturing represent promising growth opportunities, the immediate impact of the stake sale and market reactions cannot be overlooked. Investors will be closely monitoring these developments as they assess the long-term viability and profitability of EasyMyTrip in an increasingly competitive travel landscape.
You might also be interested in – IEX shares fell by 7% following reports that market coupling could be introduced by FY25
