Just Dial founder Mani sells 21% to Reliance Retail in Rs 1,332 crore block deal

Mumbai: Just Dial founder and managing director VSS Mani sold 1.31 crore shares or about 21% stake pre-dilution in the company to Reliance Retail Ventures through a block deal on the BSE on Tuesday. Last week, Reliance Industries announced its retail arm would buy 67% stake in Just Dial for around $700 million, or ₹5,222.8 crore.

On Tuesday, Mani’s stake in the company was sold at ₹1,020 per share, valuating the transaction at ₹1,332 crore. VSS Mani and his family held a 35.5% stake in the company on March 31, 2021.

As part of the deal, Just Dial said it will make a preferential allotment to Reliance Retail at ₹1,022.25 share to infuse ₹2,164.88 crore into the company. Shares of Just Dial declined 2.76% to ₹989.70 on Tuesday.

Simultaneously, Reliance Retail has also announced an open offer for buying an additional 26% stake, or 2.17 crore shares, from the public shareholders of Just Dial at ₹1,022 per share, a 4.76% discount to Friday’s closing price of ₹1,073.

After the deal, Mani will hold a nearly 11% stake in Just Dial and continue leading the company as managing director and CEO.

Starting as a phone-based service in 1996, listing local services, the company was a market leader in the discovery, with an over $2 billion valuation in 2014, a year after listing. But over the years, it lost market share as a hyper-competitive consumer internet landscape, and VC-backed rivals ate into its pie. The current market capitalisation of Just Dial is ₹6,163 crore.

Brokerages have turned bullish on the stock, as they feel Reliance’s parentage would soon bring in a differentiated advantage to the local search engine platform.

“The fact that Just Dial ‘complements’ broader RIL’s portfolio is comforting. We see loose similarities with RJio’s / L&T’s acquisition of Saavn/Mindtree. It remains to be seen how the dynamics of a ‘potential’ amalgamation with RIL plays out in the long run,” ICICI Securities said in a note.