When situations turned worse for most of us due to the Covid-19, and all of us were restricted to our homes with few hopes of breaking the chains and going out, EaseMyTrip managed to sail past the hurdles and made their stock market debut on March 8, 2021.
The journey wasn’t an easy swim on calm waters though!
What did EaseMyTrip achieve?
Covid-19 has turned the tables for all of us and on almost all occasions, it has been for the worse. The period of the pandemic has seen everything including layoffs, pay cuts, dissolution, and liquidation but in the midst of all these horrors, EaseMyTrip, led by the brothers, Nishant Pitti, Rikant Pitti, and Prashant Pitti, launched its Rs 510 crores initial public offering (IPO).
After the co-founders diluted their 25 percent stake, they were set to issue shares worth Rs 510 crore. The company stated they were oversubscribed by 159 times, which put forth a demand of around Rs 44,881 crore. The total valuation of the company stood at Rs 2,040 crore during the IPO, as per the reports.
Prashant Pitti, one of the co-founders of the company made it clear that EaseMyTrip has never been a company that heavily stressed on marketing. “The company was profitable and growing. It felt like a good fit for the IPO”, added Prashant.
Each share was sold at Rs 187 during the IPO, which is now trading at Rs 230. The shares of EaseMyTrip have thus generated around 23% profit for investors within just two months.
EaseMyTrip was successful in making a business of Rs 4,204 crores in the previous financial year. The EBITDA of the company for FY20, as per Prashant, was Rs 49.8 crores, and that for nine months of the financial year 2021 was around Rs 43.4 crores. It was towards the end of 2020, in the month of December that the company’s overall cash or cash equivalent raised to Rs 208 crores from Rs 148 crores in March 2020.
According to Prashant, the company has listed 17 percent of the share amount above the premium, which is still consistent.
Why was this feat hard for EaseMyTrip to achieve?
EaseMyTrip is a company that drives its sales through its wide range of travel booking services including flight booking, booking of hotels, and processing visas. For a company that is based on the travel and tourism industry, the coronavirus pandemic was surely an uphill journey more than ever. However, according to the company, they have been frugal, curtailed a lot of things, went wise with several others, and aimed for the bigger goal to pull off such a feat!
How did EaseMyTrip manage to achieve this feat?
The growth that EaseMyTrip showed during the pandemic might seem unprecedented to most of us but it is simply a result of a lengthy effort for days, months, and years.
EaseMyTrip made a breakthrough in the market
EaseMyTrip, the brainchild of the Pitti brothers was started by the idea of helping people go about their travel bookings seamlessly and bringing parity to the whole booking process.
Back in those days people exceedingly relied on the booking agents to make their booking possible, and ultimately ended up paying more to them. In one such flight booking made by the father of the co-founders, the Pitti brothers discovered that their father paid more to the agent than the actual prices online. This incident led to the launch of EaseMyTrip in 2008.
The Delhi-based online travel agency initially aimed to ensure that the travel agents would receive the same prices and commissions as they did from the other similar booking websites.
Furthermore, they also ensured that the customers would also stay in this loop and would receive the same prices from the booking agents. Moreover, the team also wanted to build a software as a service program that would serve as an easy-to-use webapp that would make travel bookings hassle-free.
While the travel booking agents initially had to pump in some money with each airline to avail of the bookings, they received only around 3-4% commission. However, EaseMyTrip, on the other hand, came up with the idea of letting the travel agents book for any airlines against an initial deposit of Rs 50,000 and allowed a 5% commission on the same. This helped them effectively reduce their capital expenses and increase their profit margins.
Bootstrapping their way forward
As soon as EaseMyTrip was launched, the founders decided to raise money to start with their company, however, the market was found unfavorable soon after that. EaseMyTrip focused on a B2B market, which was something unique in the market that was already full of B2C companies like MakeMyTrip and Cleartrip. This well made EaseMyTrip a competitor to the already established online travel companies and also left bootstrapping as the only option left.
EaseMyTrip bootstrapped their business success as a B2B company, and soon entered the B2C market offering the facility to avail their services without any convenience fees.
Countering the Covid-19-induced adversities
Though EaseMyTrip was a running business well before the pandemic struck the markets, waddling through the pandemic was difficult for any business, and EaseMyTrip was not an exception. However, the company had to win over the situation anyhow, which they managed with the help of some laudable efforts from their end.
Rising up to the dizzying demands
As soon as the lockdown was announced, the government decided to resort to extreme restrictions on traveling, including a dead stop of both the railways and domestic and international air travel.
This resulted in multiplied call volumes. EaseMyTrip also had to abide by the work from home culture and resorted to WhatsApp messages to tackle the overflow of calls, which were then responded to by the executives one by one.
This not only boosted the goodwill of the company during these testing times but also helped in keeping things on a budget.
Early refunds policy
Deeming that the people are scared as well as scattered all across the country, EaseMyTrip decided to refund the money of their customers on a priority basis, even before the airlines refunded them their money.
This immediate refund policy was something really unique and positive responses came pouring in from all around the world in favor of EaseMyTrip all around the social media platforms, which further increased their reputation and added to their credibility.
Wise advertisement campaigns
As soon as EaseMyTrip absorbed the positive vibes, they thought it fit to come up with a unique advertisement campaign on social media, titled “Saath Laakh Crore ka Kharcha”.
The sole motive of the advertisement was to share the message that the Indians spent around Rs 7 lakh crores annually for their vacation. Therefore, they can easily avail of their bookings via EaseMyTrip, which is a 100% Indian company with huge benefits.
For this advertisement, EaseMyTrip had to reach out to 5-6 celebrities but the responses that the company received were overwhelming!
Discounts were curtailed
After the lockdown was lifted for the air travel, EaseMyTrip soon found out the pulse of the customers and discovered that they weren’t much concerned about the discounts and were only looking to make their trips possible. Therefore, the company reduced their discounts and managed to draw in the one percent commission that they received after negotiating heavily with the airline companies.
No pay cut policy
Payment deductions were on a rise with the COVID-19 and are always silent blemishes to a company. Therefore, EaseMyTrip ensured that they would not adopt such practices even if they had to shed some of their total strength. They reduced the total number of employees from 450 to 370 in the first wave of the coronavirus spread but they haven’t opted for any further reductions or pay cuts since then.
The Future Ahead for EaseMyTrip
“People travel for work, leisure, and to meet extended family. All this has stopped now, but it will restart”, going by the words of Sreedhar Prasad, Advisor, Analyst, ex-KPMG, and ex-Kalaari Capital.
The travel and tourism industry happens to be one of the worst affected industries post-Covid. However, the industry would soon rise and will be among the first set of booming industries.
Who is the Founder of EaseMyTrip?
Nishant Pitti is the founder and CEO of EaseMyTrip, the company commenced its operation in 2008.
Is EaseMyTrip profitable?
According to a Motilal Oswal, EaseMyTrip is the only OTA in India to have a good net profit margin over the last three years.
What is the Revenue of EaseMyTrip?
The annual revenue of EaseMyTrip is $18.8M.