Just Dial buyout could cost Reliance over Rs 5,700 crore
Reliance Retail Ventures acquired 41 percent of the local listings company on July 16.
Reliance Retail Ventures (RRVL) acquired a 41 percent stake in local listings company Just Dial on July 16.
The Just Dial stock opened 1 percent higher on the Bombay Stock Exchange, compared to Friday’s close, and declined by over 5 percent on Monday.
What’s in it for Reliance?
In November last year, Reliance Retail Ventures raised Rs 47,265 crore (nearly $6 billion) by selling a 10.09 percent stake to marquee financial investors. In the past year, Reliance Retail has launched JioMart as a B2C portal, as well as service to connect local shops with customers in their vicinity.
RRVL now has the opportunity to leverage Just Dial’s expertise in local search for services. Just Dial has a database of 30.4 million listings, and consumer traffic of 129 million quarterly unique users (as of 31 Mar 2021).
RRVL’s total investment on Just Dial
Its total investment in Just Dial could be in the region of Rs 5,700 crore after an open offer to Just Dial's public shareholders.
So far, the Reliance Industries subsidiary has bought more than 1.31 crore shares from VSS Mani, Founder and Managing Director of Just Dial—at Rs 1,020 per equity share—for Rs 1,332 crore.
Another Rs 2,165 crore has gone towards the preferential allotment of more than 2.12 crore equity shares at Rs 1,022. 25 per share.
RRVL’s open offer to Just Dial shareholders to increase its stake to 67 percent means spending another Rs 2,222 crore to acquire up to 2.17 crore equity shares. This assumes that RRVL will garner the 26 percent share from the open offer.
At Rs 5,718 crore for 67 percent, Just Dial’s enterprise value will be over Rs 8,534 crore–27.7 percent higher than its market capitalisation of Rs 6,684 crore on July 16.
VSS Mani and Anita Mani’s stake in Just Dial: 9.72 percent
VSS Mani has sold close to 1.31 crore shares to RRVL, which is equivalent to 15.62 percent of the post-preferential share capital.
As of June 30, VSS Mani held more than 1.92 crore shares, which was 30.91 percent of Just Dial. At Rs 1,020 a share, Mani’s stake sale has fetched him a cool Rs 1,332 crore. He will continue as Managing Director and CEO in Just Dial’s next phase of growth.
Before the preferential allotment to RRVL, Just Dial’s total outstanding shares exceeded 6.22 crore. Mani’s stake sale means a dilution by 20.97 percentage points. His 62 lakh of shares gave him 9.94 percent of Just Dial. Anita Mani, his wife, held 3.09 percent, taking the family’s total share to 13.03 percent on the previous base.
After the preferential allotment to RRVL, the total number of shares of Just Dial will cross 8.34 crore, where RRVL would own 41.03 percent of the company.
Mani’s 62 lakh shares would leave him holding 7.42 percent and Anita Mani’s over 19.25 lakh shares would be 2.31 percent of Just Dial.
Together, the couple would own 9.72 percent of Just Dial after the preferential allotment.
Edited by Kunal Talgeri