Shares of Easy Trip Planners, which operates EaseMyTrip.com, soared 20 percent on Monday, November 21, after it turned ex-date for a 3:1 bonus issue and 1:1 stock split. It had fixed November 22, 2022, as the record date for the purpose of ascertaining the eligibility of shareholders entitled for the bonus shares, and stock split.
The stock surged as much as 20 percent in intra-day deals to ₹57.15, which was just 4 percent lower than its 52-week high level of ₹59.56 (adjusted to stock split and bonus), touched on May 25, 2022.
In the past one year, the stock price of Easy Trip Planners has risen 49 percent, as against a 2.7 percent rise in the benchmark Sensex.
The stock has surged nearly 70 percent in 2022 YTD. In November so far, it has advanced 14 percent following a 3 percent rise in October, however, it fell 4 percent and 8 percent in September and August, respectively.
The board of Easy Trip Planners, on October 10, 2022, had approved a sub-division/split of each existing equity share of the face value of ₹2 into 2 equity shares of the face value of ₹1. The board also approved the issue of 3 bonus equity shares for every 1 share held in the company.
"The company and its subsidiaries have grown significantly, in terms of business and performance, over the years. This is reflected in the share price of the Company. As and when the stock price rises further, it will be increasingly difficult for small potential shareholders to partake in the company's future. Keeping with the spirit of inclusion and in order to reward the shareholders the board of directors, the company as approved and recommended the said corporate actions," Easy Trip Planners said.
What are bonus shares?
Bonus shares are free shares given to current shareholders by the firm. Bonus shares are distributed in proportion to the number of shares held by an investor.
When a firm provides 1:5 bonus shares, for example, it implies that for every 5 shares purchased, the shareholder will receive 1 free share. As a result, if an investor owns 100 shares at the time of the bonus, his or her holdings will increase to 120 shares.
What is Stock Split
A stock split occurs when a company's board of directors releases additional shares of stock to existing owners without diluting their stakes' value. A stock split increases the number of outstanding shares while lowering the value of each share individually. While the number of outstanding shares changes, the company's overall market capitalization and the value of each shareholder's stake stay constant.
EaseMyTrip is one of India's largest online travel platforms in terms of air ticket bookings. It offers 'End to End' travel solutions including air tickets, hotel and holiday packages, rail & bus tickets as well as ancillary value-added services. The firm has been growing at a CAGR of 78 percent during FY20-22 in profits and is one of the fastest-growing internet companies.
According to brokerage house Edelweiss, Easy Trip is optimistic to continue its strong growth momentum in the coming years with steady profitability. The management's guidance is to accomplish gross booking revenue of ₹6,500-7,000 crore in FY23.
The travel services company has strategically followed inorganic growth by acquiring innovative companies across diverse travel segments and is evolving into a complete travel ecosystem. It is also emphasizing on expanding its non-air verticals in the next fiscal, which is a positive.
In the September quarter, Easy Trip Planners reported 12 percent YoY rise in its net profit at ₹30.63 crore as compared to ₹27.28 crore for the corresponding quarter previous year. Its total income surged 80.58 percent YoY to ₹108.04 crore for the quarter under review versus ₹59.83 crore for the same quarter in the previous year.