Why Have Mutual Funds Exited EaseMyTrip

From its listing price of ₹212 on the NSE in 2021 to now trading at ₹7.85, the EaseMyTrip (EMT) stock is selling for a song, and no one has the time to listen to this tune. 

Recent quarterly data analysed by Inc42 shows that domestic mutual funds have almost entirely sold their holdings in the company. What’s even worse is that the promoter and chairman of the company, Nishant Pitti, has pledged 98.89% of his stake. 

So, what’s really happening at EMT?

At the end of the last quarter (Q4 FY26), domestic investors were seen hitting the exit button on EMT. From nine domestic mutual funds holding 64.63 Lakh shares (0.18% stake) at the end of December, exposure fell sharply to just one mutual fund, which held 1,152 shares. A bulk of the outflow was driven by the exit of Motilal Oswal’s Nifty Microcap 250 index fund in March.

Foreign investor ownership, however, saw a brief spike. As many as 14 FPIs held 5.14 Cr shares (1.41% stake) in the company in Q4, compared to 1.62 Cr shares (0.44% stake) held by 13 such entities at the end of Q3. 

Mutual fund participation in EMT remained largely steady in FY26 before the sharp decline in Q4. However, holdings from these investors had been volatile in the previous fiscal. Here is how the trend looks:

While these sell-offs could seem routine to some, the significance of mutual fund investment in a company is critical. 

According to Shweta Rajani, head of mutual funds at Anand Rathi Wealth, a high proportion of mutual fund or institutional ownership is a hedge against the volatility of a stock. Such investors typically invest with a long-term investment objective and do not trade frequently, which helps stabilise price movements. 

“Coordinated exit across funds is usually triggered by multiple factors such as earnings downgrade, stress in the business model, corporate governance concern, valuation stress & exclusion of the fund from the underlying index for passive funds.” 

Simply put, mutual fund ownership creates a perception of stability — patient capital, governance oversight, and downside support. Once this conviction weakens — be it due to earnings volatility, competitive intensity, or shifting sector narratives — the company starts to repel investors. EMT is the same bus, the one most investors want to deboard.  

Meanwhile, here is what else is unfolding at EaseMyTrip.

In A Tailspin

Institutional investors backing a public company largely focus on fundamentals. This sticks out like a sore thumb in the case of EMT.  “We can see that despite meaningful MF ownership earlier, a sharp decline in revenues, earnings pressures, and management instability led to a sharp fall in the stock,” said Rajani.

Over the past four quarters, EMT has been grappling with growth stagnation and margin compression — major red flags for institutional investors.

Its operating revenue has remained largely under pressure over the past few quarters. 

Bottom line, too, remained tepid. Net profit fell from ₹13.9 Cr in Q4 FY25 to just ₹44.3 Lakh in Q1 FY26. The company slipped into the red in Q2, making a loss of ₹36 Cr, after a one-time loss of ₹51 Cr. While Q3 saw some respite, with a profit of ₹3.4 Cr, earnings remain significantly below the historical levels.

A key concern has been the continued weakness in the core air ticketing business. Revenue in this segment has seen steep declines, dropping 46% YoY in Q1 to ₹57 Cr. The metric stood at ₹72.1 Cr (down 22% YoY) and ₹97.65 Cr (down 22% YoY) in the consequent quarters.

While non-air segments such as hotels and holiday packages have reported stronger comparative growth in bookings, they did not translate into proportional revenue or profit gains, with these verticals even slipping into losses in multiple quarters.

“When fundamental issues arise in a company, multiple funds often reassess their positions. In EaseMyTrip’s case, weakening fundamentals eroded conviction across funds, and exits were driven not only by redemptions but also by active portfolio rebalancing decisions. As several funds reduced exposure at the same time, selling pressure increased sharply at the stock level,” Anand Rathi’s Rajani added.

The upcoming quarterly disclosures are also expected to be under pressure. This is primarily owed to the ongoing conflict in the West Asian region, which has impacted growth for companies in the travel segment. 

As per JM Financial’s internet equity lead, Sachin Dixit, the conflict in the region is likely to leave the biggest crater in the travel tech segment in the overall consumer internet segment. 

The impact is also expected to dent the top lines of EMT’s listed competitors in India — Yatra and ixigo — in the March quarter. However, institutional investors are more optimistic about these companies. 

Domestic funds can be seen increasing their exposure to competitors Yatra and ixigo.

In the March quarter, mutual fund holdings in Yatra and ixigo increased 19% QoQ to 1.64 Cr shares and 6% to 2.53 Cr shares, respectively.

EMT Founders Pledge Stocks

While the three Pitti brothers continue to hold a significant percentage of the company — Rikant (25.22%), Nishant (12.38%) and Prashant (10.03%) — they have routinely pledged their shares for ‘personal use’ over the past several quarters.  

Nishant, in particular, most recently pledged shares worth ₹55 Cr to Motilal Oswal Financial Services for personal use over the past week. This follows an earlier pledge of shares worth ₹94.5 Cr in July 2025.

Beyond pledging, Nishant has also been actively monetising his holdings. He sold nearly 5 Cr shares worth ₹78.3 Cr via a block deal in December 2024, shortly before stepping down as CEO in January 2025. He transitioned to a non-executive role, with Rikant taking over the operational reins of the company.

Prashant, meanwhile, stepped down from his executive role as the managing director in August 2025 and has since shifted focus towards building startups outside the listed entity. His new ventures include MSME-focused NBFC Optimo Capital and plant-based nutrition brand MillD Store.

Rikant, who now leads EaseMyTrip as the CEO, remains the most actively involved in day-to-day operations. However, he also expanded beyond the core OTA business, launching an AI-focused venture studio in 2025.

Taken together, the moves suggest a gradual decentralisation of founder focus, with all three promoters either monetising, leveraging, or diversifying their exposure. 

While such breakaway businesses and interests are not uncommon for listed startup founders, such shifts often raise questions around long-term alignment, especially at a time when institutional investors are already trimming their stakes in the company. 

Take the case of Eternal. Deepinder Goyal took a backseat from day-to-day operations, and Albinder Dhindsa stepped in to carry the torch. Even in a pressure situation such as the higher FII outflow from India in recent months, Eternal managed to dodge a big blow due to the backing of domestic funds. 

Such a natural transition has not happened at EMT, which is the basis for why analysts believe that even domestic funds have exited the company.  

Amid all of this, EaseMyTrip announced plans to raise ₹500 Cr in February to bolster its presence across non-core segments. Two months on, there is hardly any update. With much at stake, the numbers for Q4 could give more clarity — but will that bring any of the institutional investors back? 

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Edited by Shishir Parasher
Creatives by Abhyam Gusai

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