Should You Dial Into It?

Continuing with our IPO introduction series, here is another company in an unconventional business which plans to list its equity shares on the Indian bourses. Just Dial Ltd (Just Dial) is coming up with an offer of sale for 95.54 lakh equity shares of face value of Rs 10 each by its existing shareholders. The issue will constitute 13.53% of the fully diluted post-issue paid up capital of the company. As this issue is a sale of secondary equity shares, the selling shareholders will receive the proceeds. 

Just Dial is a local search engine with a massive database of local businesses, products and services across India. The company provides users of “Just Dial” search service with locality-wise, city-wise information and user reviews free of cost. The users can access this search service through multiple platforms such as the internet, mobile internet, telephone (voice) and text (SMS). In fiscal 2012, the company addressed over 254.3 million search queries across all platforms. The company has a first mover advantage as one of the first companies to offer local search services in India.

Its search service bridges the gap between users and businesses by providing relevant information about providers of products and services and giving direct access of prospective customers to the businesses listed in the company's database. The search service is predominantly beneficial to SMEs, due to lack of cost effective options to access and advertise to a large number of prospective customers. Listing businesses on the company's search service provides a priority position basis in search results and catogerising these businesses as ‘paid advertisers’. Just Dial has a database of approximately 7.7 million business listings as of June 30, 2012.

The company is operating a pretty unconventional business which is based on new-age technology of internet. In the present scenario, we do not have any company which is similar to Just Dial in the listed space, though there are many in the unlisted arena. Just Dial can be partially compared with Info Edge (India) Ltd in the listed space. However, we will wait until the selling shareholders come up with the price band for the issue which will throw light on how well it fares on the valuation front.