Just Dial Ltd, the Mumbai-based directory service provider promoted by V S S Mani, has revived its initial public offering (IPO) plan, a move that will help private equity (PE) investors partly monetise their holdings.
The company that received capital markets regulator Securities and Exchange Board of India’s approval for the IPO in April this year had postponed the issue as a depreciating rupee deterred foreign investors from Indian markets. The company, however, raised Rs 327 crore from existing PE investors, Sequoia Capital India and SAP Ventures, in June. This took Just Dial’s total fund rasing from PE funds to Rs 580 crore.
“The company does not need fresh fund as it has already raised that, but it needs to bring the IPO to provide investors an opportunity to monetise their investments,” said a person familiar with the development, requesting anonymity.
Since the IPO is now intended for the secondary sale of shares of PE investors stake and not for the issue of fresh shares by the promoters as approved by Sebi in April, the company has once again filed for regulatory approvals by revising the proposed capital structure.
Sequoia Capital, SAIF Partners and Tiger Global Holdings own 18.5, 19.84 and 20.22 per cent holdings, respectively, in the company. Besides, EGCS Investments has 0.93 stake in Just Dial, while SAP Ventures owns 1.59 per cent stake.
All these players have proposed to partly divest their stakes. Out of this total 61.08 per cent stake held by the five PE players, the company has proposed to sell their 13.7 per cent stake through the IPO. The 13.7 per cent stake account for about 9.55 million shares. The total equity share outstanding of Just Dial will remain 69.4 million shares post the IPO.
Promoter and the promoter group company together hold 37.39 per cent stake in the company which they are not diluting. Actor Amitabh Bachchan also owns a 0.09 per cent stake in the company.
The Indian units of Citigroup and Morgan Stanley are the book running lead managers to the offer. While the firm does not discuss valuation, industry analysts say that for non-retail internet companies valuations can go as high as 10 times of revenue. Just Dial recorded over Rs 260 crore revenue in FY2011-12 and a profit of over Rs 50 crore. From this yardstick, it can be valued at around Rs 2600 crore and its 13.7 per cent share proposed for sale would bring Rs 356 crore back to the PE investors.