Easy trip share price

Easy Trip Planners Announces 177.2 Crore Bonus Shares Amid Stock Dip: What This Means for Investors

Online travel agency giant, Easy Trip Planners Ltd., known for its platform EaseMyTrip, has just announced a major move! On Monday, the company’s board approved a proposal to issue a whopping 177.2 crore bonus shares at a face value of Rs 1 each. This will see the company’s post-bonus share capital soaring to Rs 354.4 crore. But what does this mean for shareholders, and why did the stock drop after this big announcement?

1:1 Bonus Share Issue – What’s the Catch?

The board’s decision includes a 1:1 bonus share issue, meaning shareholders will receive one additional fully paid-up equity share for every one they currently hold. This is Easy Trip Planners’ third bonus issue in recent years, following a similar 1:1 bonus issue in March 2022. Yet, despite this exciting news, shares of the company saw a dip.

The company shared, via an exchange filing, that the bonus issue is still subject to shareholder approval, and the record date for determining eligibility is yet to be announced. Shareholders can expect the bonus shares to hit their demat accounts on or before December 12, 2024, if all formalities are completed in time.

Why Did the Stock Fall?

While bonus issues are generally good news, as they often signal confidence from the company and help boost liquidity, shares of Easy Trip Planners fell by 0.94% to Rs 33.87 apiece on the NSE, as of 2:25 PM on the announcement day. The drop came even as the benchmark Nifty 50 saw a modest rise of 0.63%.

The stock’s decline might surprise some, but experts suggest that the dip could be due to mixed sentiments around bonus issues and market dynamics. Notably, the company’s stock has fallen by 16% year-to-date and is down 20.7% over the past 12 months. With a relative strength index of 41.42, Easy Trip Planners’ stock is trending closer to oversold territory, indicating potential price recovery opportunities.

What Does the Bonus Issue Mean for Investors?

Bonus shares allow companies like Easy Trip Planners to capitalize on their free reserves and improve metrics like earnings per share (EPS) and paid-up capital. The move should boost shareholder value in the long term, but the market reaction indicates some cautious optimism.

As of June 30, public shareholding in Easy Trip Planners stood at 35.7%, with promoters holding a significant 64.3%. The company’s market capitalization, at the time of the announcement, was Rs 6,007.2 crore. Interestingly, the board also gave a nod to increasing the company’s authorized share capital to Rs 500 crore, signaling growth intentions for the future.

Analysts Are Mixed, But What’s the Outlook?

Two analysts are currently tracking Easy Trip Planners’ stock. According to Bloomberg data, one has a “hold” rating, while the other suggests a “sell.” Despite this split in sentiment, the 12-month price targets from analysts imply a potential upside of 21.2%, providing hope for investors who believe in the company’s growth potential.

With only a few months left in 2024, all eyes will be on Easy Trip Planners as it navigates the bonus share issuance and works to regain its stock value in a challenging market environment.

Conclusion:

Easy Trip Planners’ bold move to issue 177.2 crore bonus shares has sparked curiosity among investors, even as its stock dipped post-announcement. Easy trip share price, The company’s strategy to capitalize on its reserves through a 1:1 bonus issue could prove beneficial for long-term investors, though market reactions remain mixed. As the company continues to expand its share capital and manage market sentiment, all eyes will be on the December deadline for bonus share distribution.