NEW DELHI: Easy Trip Planners may have had it tough during the pandemic given how travelling virtually stopped, but its first steps on Dalal Street may be mighty, as the market is expecting a handsome listing pop on Friday.
The stock, which was offered in the range of Rs 186-187 during the IPO, is trading at a premium of Rs 150-155 in the grey market, an unofficial market for unlisted shares. That means investors can hope for an 80-85 per cent gain on debut as these premiums are usually indicative of listing gains.
“It may list in the range of Rs 320-350, owing to high subscription in retail and HNI quotas. The digital theme is also in favour. However, the Covid-19 pandemic has highly disrupted the sector. It will be interesting to see how it reacts after listing, which is likely to be at a high premium,” said Abhay Doshi, Founder of UnlistedArena, a firm that tracks grey markets.
The lofty premium comes on the heels of MTAR Technologies, which delivered an 85 per cent return to investors on the first day. In the last few months, there have been multiple issues that have commanded similar premiums.
The promoters of the company which runs the
website, which helps travellers book flight tickets, raised Rs 510 crore from primary market investors. The issue garnered heightened attention and was subscribed a whopping 159.33 times.
Easy Trip Planners was ranked second among the key online travel agencies in India in terms of booking volume in the nine months ended December 31, 2020. The travel company was the only profitable online travel agency among key online travel agencies in India in FY18-20 in terms of net profit margin.
10 stocks that top mutual funds bought & sold in February
Portfolio reshuffle
As the equity assets under management (AUM) of mutual funds touched a new record high of Rs 10 lakh crore in February, money managers hiked allocation to stocks from sectors such as PSU banks, private banks, oil and gas, capital goods and utilities, and decreased weights in technology, auto, consumer, healthcare and telecom. With an allocation of 18.4 per cent in their portfolios, private banks were the top holding for mutual funds in February 2021, followed by technology (10.9 per cent), NBFCs (8.9 per cent), and oil & gas (7.2 per cent). Here is a list of 10 stocks that mutual funds bought and sold the most, according to a report by Motilal Oswal.
Tata Motors
Tata Motors, in which ace investor Rakesh Jhunjhunwala bought a stake last year, appeared to be the favourite of fund managers in February. Cumulatively, the holding of all mutual funds in Tata Motors went up by 13.3 per cent on a month-on-month basis. HDFC Mutual Fund bought 74,09,000 shares while Canara Robeco bought 40,00,000 shares of the Tata Group company. Several brokerages have maintained a bullish view on the automaker, citing sales recovery, improving margin, thrust on EVs, and its plans to turn debt-free by FY24.
IndusInd Bank
Mutual funds increased their holding in IndusInd Bank by 10.9 per cent, their second highest conviction bet in the month. Nippon India bought 18,98,000 shares of the blue chip, while UTI bought 257,000 shares and Invesco 11,40,000 shares. Last month, Morgan Stanley had retained its ‘overweight’ call on IndusInd Bank while global brokerage CLSA had recently maintained its bullish stance with a target price of Rs 1,325. In the last one year, the stock has gained about 55 per cent.
NTPC
Fund managers raised their bets by 3.8 per cent on NTPC during the month. At least four mutual fund houses have exposure of more than 2 per cent in the PSU stock. NTPC was the seventh largest investment for HDFC Mutual Fund that bought 1,87,06,000 shares of the power major in February. Other buyers include Nippon India, ICICI Prudential, Aditya Birla Sun Life and Franklin. In the last one month, the stock has gone up by over 11 per cent but has underperformed the benchmark indices in 1-year, 3-year and 5-year timeframes.
Eicher Motors
Eicher Motors, the maker of Royal Enfield bikes, was the third largest buy for mutual funds as their investment in the stock shot up by 3 per cent. Besides other fund houses, Tata Mutual Fund bought 376,000 shares of the auto stock that has been underperforming after its Q3 results. In the last 1 month, the stock has lost over 2 per cent of its market value.
The IPO was valued at 58.7 times FY20 EPS, and 49 times on an annualised FY21 basis. Besides, it was valued at 15.2 times the book value, which Reliance Securities said was aggressively priced.
The brokerage said that the travelling industry is unlikely to recover significantly in FY22. The company’s involvement in unrelated businesses like coal, movies and share trading — even as Easy Trip discontinued them in FY18 — still raises apprehension.
.
In the recent months, sales have recovered for the travel and tourism industry, but are still far from pre-Covid levels. Moreover, restrictions on foreign travels — which is the major source of revenue for ticket-booking sites — still remain.
Nearly 90 per cent of the company’s revenue is from the sale of air tickets, and the remaining from hotel room bookings. It has tie-ups with most of the domestic airlines and 23 hotel aggregators. Due to these tie-ups, the company provides attractive deals to travellers, and does not charge a convenience fee from customers.
