Just Dial soars 19 percent on market debut

MUMBAI (Reuters) - Search service provider Just Dial Ltd rose as much as 19.2 percent in its stock market debut on Wednesday after the company raised about $165 million last month in the country's biggest listing so far this year.

Shares in Just Dial were trading at 614.1 rupees on the National Stock Exchange at 11:04 a.m. after hitting a high of 631.9 rupees, compared with their initial public offer price of 530 rupees a share, valuing the company at 37.03 billion rupees.

The Nifty was down 0.21 percent.

Despite the strong debut, investment bankers and analysts said Just Dial's listing was unlikely to open up India's moribund IPO market in the near term, given only a few medium-to-large sized issues are in the pipeline as the NSE index is up only 0.2 percent for the year.

"Just Dial is a quality IPO and markets separate men from boys," said Deven Choksey, Managing Director of K. R. Choksey Securities in Mumbai.

"The secondary market needs to be extremely strong for IPOs to benefit. So unless it is a unique IPO, it wouldn't be successful."

Just Dial's IPO, in which the company's founders and private equity investors including Sequoia Capital and Tiger Global sold some of their shares, was the biggest since Bharti Infratel Ltd's IPO of about $750 million in December last year.

Mumbai-based Just Dial, which offers search for local businesses through Internet and mobile platforms, sold 17.5 million shares through the IPO, or 25 percent of its total equity, which was subscribed 11.6 times.

The search service provider's IPO has attracted foreign banks, including Goldman Sachs and HSBC , as well as domestic institutional investors Birla Sunlife Trustee Co.

Citigroup and Morgan Stanley were the lead managers to the issue.

(Reporting by Indulal P.M., Additional reporting by Abhishek Vishnoi; Editing by Rafael Nam and Jijo Jacob)