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Business News/ Companies / EaseMyTrip aims to raise 1,000 cr by April, eyes acquisitions in non-air space
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EaseMyTrip aims to raise ₹1,000 cr by April, eyes acquisitions in non-air space

The company board gave an in-principle approval for raising funds of up to ₹1,000 crore through a combination of preferential issue of equity shares along with warrants.

Prashant Pitti said the broader goal of the management is to build an EaseMyTrip group with various air and non-air related businesses.Premium
Prashant Pitti said the broader goal of the management is to build an EaseMyTrip group with various air and non-air related businesses.

Online travel platform EaseMyTrip aims to raise 1,000 crore within the next 3-4 months in order to largely focus on inorganic growth of the company in businesses unrelated to aviation sector, co-founder Prashant Pitti told Mint.

“This would be the first time the company would be taking any external capital. Till today, the company is bootstrapped. We are in the process of empanelling bankers to start the fund-raising. We already have a couple of investors who have shown interest. We expect this to happen over the next 3-4 months," Pitti said.  

Earlier this month, the company board gave an in-principle approval for raising funds of up to 1,000 crore through a combination of preferential issue of equity shares along with warrants.

Last year, EaseMyTrip acquired a majority stake in three Indian travel companies including Guideline Travels Holidays, TripShope Travel Technologies and Dook Travels as part of its growth strategy. It has also secured a non-controlling 13% stake in Eco Hotels and Resorts Ltd.

“Among the interested investors, one is domestic, and the other is foreign. In terms of usage of funds, at least more than 50% of the funds will be for acquisition of non-air related companies as we are already very strong in air business. We will use the rest of the funds for marketing activities for the company," he said.

In the non-air category, EaseMyTrip said that it is eyeing opportunities in business-to-business, business-to-consumer, business-to-business-consumer categories, hotels, holiday segment, bus and cab segments as well. However, it is not looking at acquisition opportunities related to train transportation category. 

"Besides train segment, there are a bunch of people we are speaking to right now and this is why we are doing the fund raise," he added.

On Wednesday, the company also announced the launch of its new subsidiary, EaseMyTrip Insurance Broker Private Ltd to tap into the Indian insurance market.

The company said that the diversification into insurance segment made sense as under its own survey, it found a 75% overlap in its 20-million customer base between the customers who are booking an air ticket online and those who are buying insurance online.

“This is the first time we are doing something outside travel space, we feel extremely comfortable working with digital goods. We want to stay in digital goods and high-order value category, so insurance fit in perfectly. Insurance is an asset-light, inventory-light investment model," Pitti said.

The company has been working on the technology for deploying insurance business since the last 7-8 months and expects to unveil the insurance company to the public within 3-4 months. The product will be offered as part of air ticket bookings but it will provide the entire insurance range as well including motor vehicle insurance, health insurance, life insurance among other categories.

“It is as big a market as a travel product. Knowing that there is a 75% overlap gives us enough comfort that the company breaks even or makes money within the first year of starting the business," Pitti said, adding that the broader goal of the management is to build an EaseMyTrip group with various air and non-air related businesses.

For July-September quarter, the company had reported a net profit of 47.2 crore, registering a growth of 67.2% on year and the consolidated net profit for the company had stood at 25.9 crore for the June quarter.

The company’s management reiterated that it is on track to achieve the target of posting profit before tax of 250 crore for the current financial year ending March 31. 

The company also came under limelight this week when it suspended further bookings for Maldives on its platform following adverse comments by three ministers of Maldivian government against Prime Minister Narendra Modi. The move has garnered mixed reactions on social media platforms. 

“There is no lip service, we are actually taking a revenue loss. It would have been easier for me to say I will never go to Maldives in future. However, I am actually taking a revenue loss and I am the only one who is still willing to take a revenue loss, none of the competitors have taken such a step. Now, people are supporting us, at the time of doing it we did not know how would this snowball or whether people will support, but we took the decision on what we thought was the right thing for us to do as a person in power with responsibility to keep stature of country on high morale. As of now it is a status quo," he said.

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Published: 12 Jan 2024, 02:02 PM IST
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