4,600% windfall for Amitabh Bachchan from Just Dial

If IPO is fully subscribed at upper end of price band or Rs 543, gains will be at 5,330%

Amitabh Bachchan will make gains of at least 4,600% in the initial public offer (IPO) of Just Dial, and that’s only at the lower end of the price band.

If the IPO is fully subscribed at the upper end of the price band or Rs 543, the gains will be at 5,330%.

He was allotted 62,794 shares at a price of Rs 10 in January 2011, according to a disclosure in the company’s red herring prospectus, an information document that every company coming out with a maiden public issue has to make available to potential investors.

The shares were ‘allotted in accordance with the share subscription agreement dated February 10, 2011 executed between our Company and Amitabh Bachchan,’ said the prospectus.

The shares were then valued at Rs 6.27 lakhs. They are now worth between 2.95-3.40 crore.

The company is coming out with an IPO which will be open for public subscription between May 20-22.

Aditya Birla Money in an IPO note dated 17th May recommended that the issue be avoided because it is too expensively priced.

“We believe that the steep pricing of the IPO factors in the medium term growth expansion. In addition, entering into low-entry barrier business model (Google India & Nokia City lens app biggest threat) – demands rigorous monitoring and also has the risk of technological obsolescence. Moreover, 16% of the issue size is an offer of sale by the existing promoters – a move not likely to inspire confidence among investors,” said the report authored by Dinesh Kumar K.