Just Dial share rises 4% as Reliance Industries in talks to buy search engine
Just Dial share rose 4% today amid reports that Mukesh Ambani-led Reliance Industries is in talks to buy the search engine firm from its founding promoters for $800-900 million. The stock has gained 3.78% in the last 2 days. The stock touched an intraday high of Rs 1,123.15, rising 3.98% on BSE.
Just Dial stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
Total 2.76 lakh shares changed hands amounting to turnover of Rs 30.47 crore on BSE.
Market cap of the firm rose to Rs 6,954 crore on BSE.
The mid cap share hit 52-week high of Rs 1,138 on July 14, 2021 and 52-week low of Rs 333.05 on September 25, 2020.
Just Dial share has risen 76.63% since the beginning of this year and gained 201.77% in one year.
Reliance in talks to buy Justdial for $800-900 mn
Once complete, the deal will allow Reliance access to the 25-year-old listings company’s merchant database.
A formal announcement related to the deal is expected on July 16. The search engine has called for a board meeting on the day, according to a report in The Economic Times.
The Mumbai-based firm is the market leader in the local search engine segment with 150 million average quarterly unique visitors. The company operates across platforms like mobile, apps, website and a telephone hotline with the number 8888888888.
Managing Director VSS Mani and family hold 35.5 per cent stake in the firm. The company is currently valued at Rs 2,387.9 crore.
RIL aims to buy partially from Mani and put up an open offer for additional 26 per cent of the company’s equity. At current share prices, it could lead to a payout of Rs 4,102 crore. According to the ET report, if the open offer is fully subscribed to, then Reliance will own over 60 per cent stake, and Mani will serve as a junior partner.
Reliance is also expected to infuse capital into the listings company.
Both sides have been engaged in talks since April. Shardul Amarchand Mangaldas and Co, Cyril Amarchand Mangaldas and Goldman Sachs are the advisors to this deal.
Earlier, there were reports that Just Dial was engaged in talks with Tata Sons for an investment opportunity in Tata Digital’s super app. However, those talks seem to have ended abruptly.
Reliance dials 8888888888 to shop for Justdial
Agencies Justdial founder VSS Mani
Even as the Future Group buyout remains caught in legal crosshairs with Amazon, Asia’s richest man Mukesh Ambani is making a move on his next strategic target.Ambani’s telecom to petrochemicals conglomerate, is in advance negotiations to buy Just Dial (JD) from its founding promoters in a $800-$900 million transaction, said multiple sources aware. The transaction, once successful, will help, Reliance Retail leverage the merchant database of the 25-year old information search and listings company as well as its pan India network, to further accelerate its own local commerce and payments play.Just Dial has called for a board meeting on Friday July 16 to “evaluate” fund raising proposals. A formal announcement is expected on that day.Reliance is already the largest organized retailer in the country whileis the market leader in local search engine segment with nearly 150 million average quarterly unique visitors across multiple platforms like mobile, apps, website and 8888888888 telephone hotline.First generation entrepreneur and the managing director VSS Mani and family controls 35.5 per cent of the company which currently is valued at Rs 2387.9 crore.is planning to buy partially from Mani and would trigger an an open offer for an additional 26% of the company’s equity which at current prices could lead to a Rs 4102 crore pay out, at current share prices. If the open offer is fully subscribed to, Reliance will end up with over 60% stake with Mani staying on as a junior partner to run the operations and ride the future upside. The deal will also see a primary infusion of capital into the company by Reliance, added the sources mentioned above.The Justdial stock has already appreciated 52.4% in the last six months, to touch its 52-week high of Rs 1,138 to close at Rs 1,080.15 on Wednesday. Much of this, feel market analysts, is in anticipation of a deal.Talks between both sides have been going on since April in multiple spurts but gathered momentum after sale talks with Tata fell through, earlier this year. Shardul Amarchand Mangaldas and Co, Cyril Amarchand Mangaldas and Goldman Sachs are the advisors in the transaction.ET in its March 8 edition had reported that Tata Sons engaged with the Justdial management to explore an investment to support Tata Digital ’s efforts to create a super app. However, those discussions ended abruptly.Mails to Reliance and Justdial last Saturday did not generate a response. Neither did calls and messages to Mani.“Other than its network and loyal customer base, a key factor is also JD’s comparatively modest valuations that can be build upon,” said a company executive on condition of anonymity as the talks are in private domain. The stock is trading at 35 times FY23 earnings compared to peers like Indiamart that is trading at 50 times multiple.Starting out as a phone-based service in 1996, listing local services the company was a market leader in discovery, till the convenience of ecommerce players followed by the onset of an army of VC backed, discount driven hyper competitive “vertical” specialists, several of them with unicorn valuations, like Practo (doctor appointments) Urban Company (home improvement), Book My Show (ticketing), Zomato (food delivery), Paytm (payments) Make My Trip (travel) took away the initial sheen from Just Dial post its 2013 listing.For long, the company struggled to add additional layers to its core service offerings even though it after pivoting digitally through the JD app – positioned as India’s first super app – it sought to offer a motley of services, offerings, commerce and even payments between FY15-17 in the form of Search Plus, JD Omni and hyperlocal delivery, though it quickly abandoned the last mile services. But Search Plus didn’t deliver on its promise of ‘full stack’ B2C services forcing the company to yet again change tack to focus on B2B (launched earlier this February) and transactional B2C offerings.This is the first of the upcoming products as Justdial departs from a ‘one size fits all’ approach, argues Vivekanand Subbaram of Ambit Research. “Unlike common perception of internet businesses being winner take all, we believe that the B2B marketplace model has room for multiple players with a variety of business models existing in tandem. Justdial’s strength is its sales presence in tier 2 cities (markets excluding its top-11 cities) and traffic. The company capitalised on the rise of middle cities by driving a virtuous cycle of traffic, paid campaigns, realisation and hence revenue. We expect Justdial to aggressively target retail-oriented B2B categories to acquire leads via JD Mart,” he said.But despite long term potential, not everyone is convinced of immediate results as Justdial has lagged in the face of competition from full-stack consumer vertical companies or horizontal platforms like Google and Facebook, with mere 3% revenue CAGR in its top 11 cities over FY18-20.“We factor in a sharp dip in the company’s operating performance in the near term on account of the impact of the second wave of the Covid- 19 crisis on collections/revenues; the elevated advertising spends that the company intends to incur in FY22 to promote the recently launched JD Mart platform and company’s commitment to simultaneously encourage more transactions on its B2B2C platform through the introduction of ‘JD Cash,” feel Manik Taneja and Swapnil Potdukhe, internet analysts withMoreover, in a price conscious market, how do you monetise existing B2C customers into newer B2B offerings or get them to uptrade remains a key challenge. That’s where industry players feel a deep pocket player like Reliance can capitalize the business for the next phase of growth.The number of paid listings that were growing at 30% Y-0-Y till FY15 have shrunk to 5.5% CAGR growth. Between FY20 and 21, paid listings are also down by 15% but the company remains profitable and debt free. “Mani grew his company frugally, but its service offerings have been patchy unlike the late entrants,” said a rival CEO from an internet firm who did not wished to be quoted. “He was always focused on cash flows and not growth unlike other players. Even though he has a loyal base, the lead generation has become suspect.”After aggressively on boarding kirana stores and assisting them with sourcing and procurement, point of sale (PoS) machine, financing, inventory management and tax return filing services, among others, Reliance has been looking to embed its e-commerce app JioMart into WhatsApp , allowing its 400 million users order products and services without having to leave the messaging app. Last April, Facebook Inc. had bought a 9.9% stake in Jio Platforms for $5.7 billion.“Reliance Retail has an ambitious plan of digitally connecting kirana stores (B2B) which would serve as a back-end for B2C new commerce, over time. Plans are underway to expand beyond grocery, electronics and apparel and become a complete horizontal platform,”said Vivek Maheshwari of Jefferies.
just dial share price: Buy Just Dial, target price Rs 1100: Yes Securities
Did you Know? Stock score of Just Dial Ltd moved up by 1 in a week on a 10-point scale. View Latest Stock Report »
Yes Securities has buy call onwith a target price of Rs 1100. The current market price of Just Dial is Rs 1010.7. Time period given by analyst is Intra Day when Just Dial price can reach defined target.Just Dial Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 6244.42 Crore) operating in Services sector.For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 191.25 Crore, down -4.34 % from last quarter Total Income of Rs 199.92 Crore and down -29.97 % from last year same quarter Total Income of Rs 273.09 Crore. Company reported net profit after tax of Rs 33.57 Crore in latest quarter.The stock is on the verge of a breakout from a trendline resistance placed at Rs 1020. A sustained trade beyond this hurdle on good volumes will extend the uptrend to levels of Rs 1,100. Further, volumes were good leading up to the breakout, suggesting bullishness. RSI has also turned upwards from the 58 level, confirming strength dominant in the stock .Promoters held 33.4 per cent stake in the company as of June 30, 2020, while FIIs held 35.4 per cent, DIIs 16 per cent and public and others 15.1 per cent.