Reliance Retail Ventures Limited (RRVL) announced it will acquire a controlling 66.95% stake in local search engine platform Just Dial Ltd for Rs 5,713 crore ($766 million) via preferential allotment of shares and open offer.
Billionaire Mukesh Ambani-owned RRVL signed a definitive agreement on July 16 to buy 40.95% stake in the company for around Rs 3,497 crore ($469 million) and make an open offer to acquire up to 26% equity.
VSS Mani shall continue as managing director and chief executive officer of Just Dial.
Subject to necessary shareholder and regulatory approvals, the deal includes preferential allotment of 2.12 crore equity shares equivalent to 25.33% post preferential share capital at Rs 1,022.25 per share.
RRVL will also acquire 1.31 crore equity shares from VSS Mani equivalent to 15.62% post preferential share capital at Rs 1,020 apiece.
The capital infused by RRVL will help drive the growth and expansion of Just Dial into a comprehensive local listing and commerce platform. Just Dial would expand discovery on its platform and enhance transactions for millions of products and services.
These investments will leverage Just Dial’s existing database of approximately 30.4 million listings and its existing consumer traffic of approximately 129.1 million quarterly unique users as on 31 March, 2021, the company said.
Morgan Stanley acted as financial advisor, JM Financial as manager to the open offer, Shardul Amarchand Mangaldas and Khaitan & Co as legal advisors and Deloitte as accounting and tax advisors to RRVL.
Goldman Sachs acted as exclusive financial advisor, Cyril Amarchand Mangaldas as legal advisor and Ernst & Young provided tax advisory and diligence services to Just Dial and its promoters.
Just Dial provides search related services to users across India through multiple platforms such as website, apps, over the telephone and text. Just Dial had 30.4 million listings and 129.1 million quarterly unique users across web, mobile, app and voice platforms as of 31 March, 2021.
Around seven years ago, Just Dial was valued at a staggering $1.8 billion, ahead of Flipkart ($1.6 billion) and other Internet startups in January 2014.
Today the valuation is around $900 million. Just Dial once counted VC firms like SAIF Partners (now Elevation Capital), Tiger Global, Sequoia Capital and SAP Ventures as its investors.
The company recently launched its B2B marketplace platform, JD Mart, aimed at enabling millions of India’s manufacturers, distributors, wholesalers, retailers to adopt technology, get new customers and sell their products online. The platform offers digital product catalogues to businesses and aims at digitising India’s businesses, especially MSMEs, across categories.
RRVL is a subsidiary of Reliance Industries Limited (RIL) and holding company of all the retail companies under the RIL Group. RRVL reported a consolidated turnover of Rs 1.58 crore ($21.6 billion) and net profit of Rs 5,481 crore ($750 million) for the year ended March 31, 2021.
RRVL is likely the largest and the most profitable retailer in India.