DSIJ Mindshare

Just Dial Post Issue Analysis

Just Dial (JDL) tapped the primary market on May 20, 2013 to raise Rs 950 crore. The issue was based on book-building method and the price band set for this issue was between Rs 470 - Rs 543 per share. The issue is an offer for sale (OFS) to provide an exit path for its private equity investors. Since the retail portion in this issue was just 2.5 per cent, there wasn’t much for the retail individual investors (RIIs). 

SegmentsReserved Portion
In The Issue
Percentage in
Total Issue
Number of Times
Issue Subscribed
QIBs 13123095 18.78 10.1
NIIs 2624618 3.76 22.34
Retail Investors 1749745 2.5 3.5
Private equity investors who sold their shareholding portions in the company were SAIF, Tiger Global Four JD Holdings, Sequoia III, Tiger Global Five Indian Holdings and EGCS Investment Holdings. The promoters - VSS Mani, Ramani Iyer and V Krishnan - also sold some portion of their holdings through the IPO.

The company had tried to attract RIIs by providing a 10 per cent discount on the issue price of Rs 530 (RIIs got Rs 47 discount in this issue). They were also provided a safety net of up to Rs 50000. This safety net would trigger if the share price falls over 20 per cent from the issue price. 

Name of ShareholderPercentage(%) of Shareholding
Pre – IssuePost – Issue
SAIF 19.72 11.2
Tiger Global Four JD Holdings 12.28 8.26
Sequoia III 9.46 4.87
Tiger Global Five Indian Holdings 7.62 5.12
EGCS Investment Holdings 0.93 0
SAPV 1.58 1.11
Sequoia I 4.46 4.46
Sequoia III 4.46 4.46
The issue got over-subscribed by 12 times, the major contributors being QIBs and non-institutional investors (NIIs). Out of the total 25 per cent stake sale, 18.78 per cent was reserved for QIBs, and was over-subscribed by 10 times. While the NIIs’ portion which was 3.75 per cent of the overall issue got over-subscribed by 22 times and the retail portion over-subscribed by three times against the offered size. 

After receiving a wonderful response in the primary market, the scrip got listed on the bourses on June 5, 2013 at a premium of Rs 590 per share (over the issue price of Rs 530). On the first day of its trading, JDL touched the price of Rs 628 per share during the day and closed at Rs 611. With the closing, it provided gains of 15 per cent over the issue price to its investors.

JDL is a debt-free company and has a negative working capital cycle. In addition, the company is reaping the early mover advantage to enter the local search space market in India, which has benefited the company in the primary market. The listing on bourses will provide it with a good branding platform too. Moreover, if the company expands its work area and increases its presence in the existing geographies, it is likely to perform in the long-run.

Name of PromotersPercentage(%) of Promoters
Pre – IssuePost – Issue
V.S.S Mani 30.53 28.3
Anita Mani 0.78 0.78
Ramani Iyer 2.91 2.03
V. Krishnan 2.93 2.03
However, all these are already discounted in the current JDL share prices trading at the TTM PE of 90x, which is quite higher as compared to its peer Info Edge (India) trading at a PE TTM of 34.7x. Moreover, the sector in which the company operates has no barriers on entry, as this is just about maintaining the database and providing services. 

Thus, in the near future, JDL may face tough competition from new entrants in this sector. Although JDL is performing well at the moment, its valuations are too high and we therefore advise investors to stay away from the scrip. We had recommended that investors avoid the IPO (Volume 28 Issue No. 12) and maintain our stand on this scrip.

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