Just Dial falls 5% as Reliance Retail Ventures acquires controlling stake

RRVL has announced the acquisition of a controlling stake or a 40.95 per cent holding in Just Dial for a total consideration of Rs 3,497 crore

Shares of Just Dial slipped 5 per cent to Rs 1,021 on the BSE in intra-day trade on Monday after Reliance Retail Ventures (RRVL) announced the acquisition of 40.95 per cent in the country’s leading local search engine company for a total consideration Rs 3,497 crore. RRVL made an open offer for a 26 per cent stake at Rs 1,022.25 per share.

RRVL will hold a 40.95 per cent stake via preferential allotment (25.33 per cent) and acquisition of stake from existing promoters (around 15.62 per cent). RRVL will get a 25.33 per cent stake in the company via preferential allotment of 21.2 million shares at a price of Rs 1022.25 per share.

Further, the company will acquire a 15.62 per cent stake (13.1 million shares) from VSS Mani (existing promoters) at a price of Rs 1,020 per share. The transaction is subject to shareholder and other customary closing conditions and approvals.

“The capital infused by RRVL will help drive the growth and expansion of Just Dial into a comprehensive local listing and commerce platform. Just Dial would expand discovery on its platform and enhance transactions for millions of products and services. These investments will leverage Just Dial’s existing database of ~30.4 million listings and its existing consumer traffic of ~ 129.1 million quarterly unique users (as on 31 Mar 2021),” Just Dial said in a press release.

This, coupled with a change in promoters and shift of advertising to digital medium bodes well for the company in the long run, ICICI Securities said in a note.

Reliance Retail Ventures is a subsidiary of Reliance Industries Limited (RIL) and holding company of all the retail companies under the RIL Group. Reliance Retail is the largest and the most profitable retailer in India with the widest reach.

Just Dial is India's leading local search engine platform which provides search-related services to users across India through multiple platforms such as website, apps, over the telephone and text. Just Dial had ~30.4 million listings and 129.1 million quarterly unique users across web, mobile, App and voice platforms as of 31-Mar-2021. The company has recently launched its B2B marketplace platform, JD Mart which is aimed at enabling millions of India’s manufacturers, distributors, wholesalers, retailers to become internet ready in post-COVID era, get new customers and sell their products online.

In long term, Justdial’s JD and JD Mart platforms are likely to be key beneficiaries of rising internet adoption among SMEs to take their business online to get customers and to also run their business efficiently via use of technology.