Mumbai: Easy Trip Planners Ltd's Rs510 crore initial public offer (IPO) saw strong demand, with the issue subscribed 2.34 times on the first day of bidding on Monday, led by retail investors.

Retail investors bid for over 12.64 times the portion reserved for them.

Retail investors have participated heavily in IPOs this year as well as last year, amid strong recovery in the equities markets after the covid lows of March.

The retail interest for the company's IPO comes at a time when travel demand is yet to return to pre-covid levels and a recent surge in covid-19 cases in the country, even as more people are being vaccinated now.

Most IPOs in 2021 have seen strong retail investor interest.

The Easy Trip IPO received total bids for 35.11 million shares against the 15 million on offer, according to data available with stock exchanges.

Retail investors bid for nearly 34.48 million shares against the 2.74 million offered, while the portion reserved for non-institutional investors was subscribed 0.15 times. Qualified institutional bidders were yet to put in their bids.The offer will close on 10 March.

The company has fixed the issue price at ?186-187 per share. According to analysts, grey market premium for the shares was nearly 90% or Rs160-165 on the first day of subscription.

"We like ETPL given its lean business model, differentiated offering and strong customer connect. However the travel industry which was significantly impacted due to Covid-19, is likely to take much longer time to revive; though recovery is visible and vaccination drive would further propel it. The issue is valued at 49.9x FY21E P/E on an annualized basis. Being the first in the segment to get listed in India, ETPL could generate high investor interest", said Motilal Oswal in its note to investors.

The IPO comprises an offer for sale of Rs255 crore each by promoters Nishant Pitti and Rikant Pitti. The listing will be on or around 19 March. Nishant Pitti and Rikant Pitti hold 49.81% and 49.68% stake, respectively, in the company.

Earlier, Easy Trip allocated 12.20 million shares to anchor investors at ?187 a share, raising ?229.49 crore from 35 entities, including 26 mutual fund schemes

Axis Capital and JM Financial are managing the IPO.

The company offers a comprehensive range of travel-related products and services for end-to-end travel solutions, including airline tickets, hotels and holiday packages, rail tickets, bus tickets and taxis as well as ancillary value added services such as travel insurance, visa processing and tickets for activities and attractions.

The company earns 94% of its revenue from airline tickets booked by customers from its platforms in the form of commissions and incentives.

Gross Booking Revenues decreased from ?3179.80 crore in the nine months ended December 2019 to Rs1220.76 crore in the nine months ended December 2020. Further, Gross Booking Volumes decreased from 4.05 million to 1.77 million. The impact was due to pandemic led lockdown.

Domestic and international travel restrictions imposed in India also disrupted its revenue lines. Such restrictions have continued for the greater part of the nine months ended December 2020 with only some domestic travel and government approved international travel operations commencing in June 2020.