Nishant Pitti Exits EaseMyTrip with ₹780 Crore Sale

In a major development in the Indian travel-tech space, EaseMyTrip, one of the leading online travel agencies, has announced the exit of its co-founder, Nishant Pitti. This marks the completion of his full divestment from the company, with a block deal valued at ₹780 crore. While this move indicates a strategic shift in the company’s ownership structure, it has also triggered a sharp market reaction. Let’s dive into the details of this significant development, the market’s response, and the company’s future growth plans.

The Block Deal and Nishant Pitti’s Full Exit

Nishant Pitti, who co-founded EaseMyTrip (operated by Easy Trip Planners), is set to sell his remaining 14% stake in the company through a block deal worth ₹780 crore. The transaction, which is scheduled for December 31, 2024, involves the sale of 500 million shares at ₹15.6 per unit. This move comes after Pitti’s earlier sale of a similar 14% stake in September 2023, where he sold 246.5 million shares for ₹920 crore, with prices ranging from ₹37.11 to ₹38.28 per unit.

Pitti’s exit signals the end of his journey with the company he helped build into one of India’s leading online travel agencies. As part of this transaction, institutional investors, including prominent funds such as CRAFT Emerging Market Fund PCC’s Citadel Capital Fund, Elite Capital Fund, Multitude Growth Funds Limited, Nexpact Limited, and Eminence Global Fund, are reportedly participating in the deal. With this divestment, EaseMyTrip is now poised to be fully controlled by institutional investors and other stakeholders.

A Strategic Shift in Ownership

Pitti’s decision to exit EaseMyTrip is likely driven by a combination of personal and business factors, and it represents a key turning point for the company. While Pitti has built a successful travel-tech firm, his exit signals the company’s move toward greater institutional ownership and oversight. This shift in ownership dynamics could open new doors for strategic alliances, investment opportunities, and enhanced growth prospects for EaseMyTrip in the increasingly competitive online travel industry.

The company has managed to position itself as a dominant player in the online travel space, with a broad range of services that cater to both leisure and business travelers. With Pitti’s exit, the company will likely look to focus more on its expansion efforts and innovation in the sector, particularly through its investments in technology and customer-centric services.

EaseMyTrip’s Financial Performance: A Mixed Bag

Despite the leadership change and Pitti’s exit, EaseMyTrip continues to grapple with mixed financial results. For the July-September quarter (Q2) of FY25, the company reported a 45.2% decline in consolidated net profit, which dropped to ₹26 crore. This decline in profit came even as the company posted a modest 2.1% increase in net sales year-on-year, signaling challenges in maintaining profitability amidst rising competition and increasing operational costs.

The Road Ahead: Strategic Investments and Diversification

EaseMyTrip’s financial performance in Q2 FY25 may have raised some concerns, but the company is taking strategic steps to ensure long-term growth. One of the key areas of focus for the company is its push toward diversification and investments in new sectors.

The company has announced plans to invest ₹200 crore over the next 2-3 years in research and development (R&D), product innovation, and the establishment of a manufacturing plant. This move is aimed at tapping into India’s rapidly growing electric bus market, which is expected to grow at a compound annual growth rate (CAGR) of 24% from 2024 to 2030. The foray into electric mobility and infrastructure is a bold and strategic move, as it allows EaseMyTrip to diversify its business model beyond the travel-tech sector and tap into the burgeoning green energy market.

By exploring new revenue streams, the company is positioning itself for long-term sustainability. The electric bus market, which is gaining significant traction in India due to growing environmental concerns and government initiatives to promote green energy, offers a promising avenue for future growth.

Market Reaction: A Sharp Decline in EaseMyTrip’s Stock Price

Nishant Pitti’s exit and the associated block deal triggered a sharp market reaction. On the day of the news, Easy Trip Planners' stock price took a significant hit. On the Bombay Stock Exchange (BSE), the stock fell by 9.9%, hitting an intraday low of ₹15.36. By 10:22 AM, the shares were still trading down by 8.09%, at ₹15.67.

The market’s reaction can be attributed to several factors. First, the large-scale exit of a co-founder often raises concerns about the company’s future direction and leadership. In this case, the shift in ownership from individual stakeholders to institutional investors may have caused some uncertainty among retail investors. Additionally, the sharp decline in the company’s profitability for Q2 FY25 likely added to investor concerns, particularly as the company navigates through a competitive landscape.

Surge in Trading Volumes

Along with the sharp drop in stock prices, there was a noticeable surge in trading volumes. On the BSE, 17.15 million shares changed hands, while a staggering 143.3 million shares were traded on the National Stock Exchange (NSE). This increase in trading activity indicates heightened investor interest in the company, as many likely saw the stock as undervalued after the initial sell-off. By 11:00 AM, the stock had partially recovered, but it was still down 6.5%, priced at ₹15.93 per share on the BSE.

Future Outlook for EaseMyTrip

Looking ahead, EaseMyTrip faces the dual challenge of maintaining its position in the competitive travel-tech sector while successfully executing its diversification strategy into the electric mobility market. The company’s long-term growth will depend on how effectively it can balance these new ventures with its core business.

For investors, the future performance of EaseMyTrip will hinge on the successful execution of its strategic investments and the company’s ability to regain profitability. While the exit of co-founder Nishant Pitti and the recent financial results have caused some short-term volatility, EaseMyTrip’s forward-looking strategies could position it well for future growth, provided it can navigate the challenges ahead.

Conclusion

The exit of Nishant Pitti from EaseMyTrip is a defining moment for the company. While his divestment signals a shift in ownership and leadership, it also marks the completion of a phase of growth for the company. The strategic investments in new areas like electric mobility and R&D offer a promising future, but the company must overcome short-term financial challenges to realize its long-term goals.

As EaseMyTrip moves into this new phase, both the market and investors will be watching closely to see how it adapts to the changing business landscape. For now, the company’s focus will likely remain on innovation and maintaining its competitive edge in the travel-tech space while diversifying its portfolio to ensure sustainable growth in the years to come.