facebook-page-view
Advertisement

SAIF-backed Just Dial Set To Launch India’s Largest Internet Biz IPO

By Madhav A Chanchani

  • 02 May 2012

Mumbai-based Just Dial Ltd, which runs an India-specific local business listings site, will raise Rs 360 crore (~$68 million) through a public issue which may hit the markets within the next 8-10 weeks, sources close to the development told VCCircle. 

Advertisement

This would make it the biggest public issue by an Indian company in the consumer Internet business.

Besides the primary issue of shares, the IPO also includes a secondary offering of 10.64 million shares by private investors SAIF Partners, Tiger Global Management and Sequoia Capital India besides the company’s promoter VSS Mani. 

Advertisement

SAIF had also part exited along with Helion Ventures and Sierra Ventures in the IPO of MakeMyTrip in 2010.

Advertisement

The company is looking to hit the capital markets by June eyeing valuation of around Rs 3,500 crore (~$665 million), said one of the sources familiar with the development. This would be just a tad behind NASDAQ-listed OTA MakeMyTrip and locally listed Info Edge (India) Ltd which have market cap of around $700-800 million.

Market regulator SEBI has approved the draft red herring prospectus (DRHP) of Just Dial Ltd a couple of weeks back.

Advertisement

When contacted by VCCircle, Ramkumar Krishnamachari, chief financial officer of Just Dial Ltd in an emailed statement said, "As a matter of policy we don't comment on market speculation," said. 

Advertisement

Citigroup Global Markets India and Morgan Stanley India are the book running lead managers to the issue.

Just Dial uses platforms like phone, web, WAP and SMS to connect buyers and sellers across product categories.

Largest Digital IPO 

With the total issue size expected over Rs 700 crore including the fresh issue of Rs 360 crore, Just Dial’s IPO would be the largest public offering by an Indian Internet company. In 2010, online travel portal MakeMyTrip had listed on the NASDAQ, raising Rs 326 crore ($70 million).

Info Edge (India) Ltd, which owns websites like Naukri.com, raised Rs 174 crore through its IPO in 2006. Another smaller firm in the digital domain, IntraSoft Technologies, which owns 123greetings.com, raised Rs 53.65 crore in its listing in 2010.

Expansion Plans & Valuation

With the fresh issue, Just Dial plans to deepen its presence in the 11 largest cities in India and expand beyond them. It also plans to add new products besides investing in brand building.

According to its DRHP, filed last August, Just Dial plans to spend as much as Rs 101.3 crore towards brand building through advertising campaigns and celebrity endorsements and a similar amount would be used for upgrading existing hardware and procuring new hardware. 

Around Rs 51 crore will be used to established new offices in Mumbai, Delhi, Bangalore, Chennai, Pune, Coimbatore, Jaipur and Chandigarh.

Just Dial’s consolidated total income increased from Rs 50.24 crore in FY07 to Rs 189.91 crore in FY11, representing a CAGR of 39.4 per cent. 

Its profit after tax increased from Rs 1.64 crore to Rs 28.62 crore in the same period.

At a valuation of Rs 3,500 crore it is eyeing 122x one year old historical earnings. In contrast, Info Edge (India) is currently trading at 66x its FY11 earnings on BSE and MakeMyTrip last traded at 166x its FY11 net income.

Share article on

Advertisement
Advertisement