Online local business search engine Just Dial Ltd saw its stock surge 9% to close at Rs 500.30 on the BSE on Friday, after a media report suggested that the company was in takeover talks with US Internet giant Google, a subsidiary of parent Alphabet Inc.
It hit a high of Rs 549.85 during the day, up almost 20% from the previous close of 459, before paring some gains.
Earlier in the day, Business Standard reported citing an anonymous investment banker that Google and Just Dial had entered into exclusive talks for a takeover about two months ago. It may take some more time before the discussions are finalised, the investment banker told the financial daily.
The NSE sought clarification from Just Dial on the media report.
The company, founded by VSS Mani, put out a statement, “As mentioned during our previous media, investor and analyst interactions, Just Dial, as part of its regular business, does meet various relevant corporates for exploring any business / strategic opportunities and tie-ups. However, we would like to clarify that as of now there is no proposal in respect of acquisition of business of Just Dial by Google and the news published in Business standard dated 10 November, 2017 is factually incorrect.”
A Google spokesperson told VCCircle in an emailed response that the company didn't comment on rumours.
Interestingly, in a post-earnings call on 31 October, an analyst had asked Just Dial about market speculations regarding its takeover by Google.
Meanwhile, reports have been doing the rounds on social media that Google was likely to invest in Bangalore-based hyperlocal delivery startup Dunzo Digital Pvt. Ltd.
Just Dial posted a net profit of Rs 37.46 crore in the quarter ended September 2017, clocking 26% year-on-year growth over Rs 29.62 crore in the same period last year, according to stock-exchange filings made by company.
Revenue came in at Rs 214.52 crore, up around 4% from Rs 206.33 crore in the year prior. However, on a sequential basis, the company saw a marginal decline in both revenue and profit. During the quarter ended June, it had reported a revenue of Rs 216.65 crore and a net profit of Rs 38.16 crore.
Just Dial, which was valued a staggering $1.8 billion in January 2014, has seen its value erode sharply and revenue plateau over the years. With search giant Google pretty much addressing the demand for finding local businesses, and local services like UrbanClap and HouseJoy claiming the remainder of the market, it seems to have lost its niche.