Easy Trip Planners Set to Consider Bonus Issue: last declared bonus issue in the ratio 3:1 in November 2022.

This placed Easy Trip Planners squarely in the middle as its shares gained nearly about 2% to ₹33.46 at NSE. For, it has scheduled a board meeting on October 14 to discuss the issue of bonus shares. In fact, it is in light of the company’s history of rewarding shareholders with bonus issues, as it did in November last year with a 3:1 bonus.

Now, we discuss why this bonus issue is important, recent market performance of Easy Trip Planners, and its forays into new areas of electric vehicle (EV) buses.

Bonus Issues: Shareholder's Delight

Bonus issue denotes that these additional shares are issued free of cost on the account of an already existing shareholder with reference to some proportionate number of shares. No value is being added to the absolute value of investment in the hands of the shareholder; rather, the quantity goes up in his or her hand. As an illustration, if a shareholder had 100 shares prior to the 3:1 bonus issue, then after the 3:1 bonus issue, he or she would end up holding 300 shares just based on a change in share price proportionate in nature.

Easy Trip Planners rewarded shareholders several times in the past. The company issued the last bonus shares at 3:1 in November 2022 and before that issued 1:1 bonus share in February 2022. Bonus issues make the stock more accessible to retail investors, which in turn increases the liquidity of the stock, thereby enhancing investors’ confidence normally.

Why Is Easy Trip Planners Resorting to Bonus Shares?

There are numerous reasons why a firm like Easy Trip Planners might opt for bonus issues.
Bonus issues of shares increase the number of outstanding shares. Since the number of outstanding shares increases, liquidity also increases as it becomes easier for investors to trade in shares.

Sign of Sound Health: An issuing bonus shares indicate the concern of a company that is sound with its finances and has faith in its future prospect for growth. A bonus issued several times by Easy Trip Planners is indicative of the fact that the company is financially healthy.

Bonus Shares: This has been a means whereby the companies can show appreciation to their investors, especially when they have amassed big reserves but the companies want to keep the cash instead of cashing out cash dividends.

Market Reaction: A Bounce in the Stock Price

News of a bonus share discussion at the board meeting slated for October 14 saw shares in Easy Trip Planners surge by 2% on October 9 at ₹33.46 per share. In fact, the market gets too optimistic about bonus share that prices rise in the short term as investors feel that the board may announce something good on the day of the meeting.

It is not the first time corporate action has fueled the stock positive for Easy Trip Planners. On 24 September 2024, the company saw a block deal of Rs176.5 crores involving 4.6 crore shares. Such deals attract great institutional interest in the equity. The deal accounted for 2.6% of the company’s stake at a floor price of Rs38 per share.

Foraying into the EV Segment: Easy Green Mobility

Besides its travel business, Easy Trip Planners is finally entering the electric vehicle space. Recently, the company announced Easy Green Mobility-a subsidiary dedicated to making electric buses. It can be considered an indication that the company is diversifying and trying to tap into the increased demand for green transport.

This new venture is operated in association with YoloBus-a subsidiary of Easy Trip Planners to support bus operations. Entry into the EV space has also aptly timed with India now focusing on becoming greener and more environment-friendly transportation systems.

Promoter Activity: Sale of Stake by Nishant Pitti

Just last month, one of the company’s promoters sold, reportedly, 15 crore shares, or 8.5% of his total stake, through a block deal in late September. As of June 2024, Pitti holds 28.1% in the company, and this sale represents a huge percentage of his shareholdings.

As an investor, sheer volume of promoter sales most times is a reason to worry; absorption of the shares in a block deal shows that institutional investor interest in the company is still there. This sale does not seem to have dented market confidence as much either as stock prices went up after bonus issue announcement.

Challenges and Recent Controversies

This was also the case of Easy Trip Planners, whose first half of the year 2024 was particularly grueling, more so during the month of January 2024 when it had suspended flight bookings to the Maldives following statements by the officials of Maldives on the PM of India, Mr Narendra Modi. But again the management has bounced back and that seems to be doing pretty well in the Indian market.

What's the Future for Easy Trip Planners?

The board meeting scheduled on 14th October, 2024 is going to be a turning point for the company. If the bonus issue is cleared, then investor confidence would most probably receive a further shot in the arm and may usher in a new wave of stock interest, which can be the growth trigger for future periods as well.

And meanwhile, shareholders and potential investors keep a sharp eye on the fact as the company remains conscious to observe its steps and realize that corporate governance and strategic growth are back on firm tracks.

Conclusion

Bonus consideration by Easy Trip Planners marks the company’s another sign of excellent financial performance and a commitment towards rewarding shareholders. The company, with a very bold move into the EV market, looks to be very well-positioned for growth going ahead.

The company will declare its results on 14th October, and investors would want to be positive in terms of the correct direction for the company. In addition to robust market action, plans of strategic scaling up in the bonus issue, the stock bright spot that seeks attention is like Easy Trip Planners.

Disclaimer:

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