Justdial.com

Inception

Founded in the year 1996, Justdial was founded by Managing Director and Chief Executive Officer, V.S.S. Mani N.B, M.B. He started the company with 6 employees, some rented computers and borrowed furniture in a hired garage space. The idea was conceived by Mr. Mani while working for United Database India (UDI), a yellow pages company in the year 1987. The number 888 8888 initially belonged to Mumbai's Kandivali Exchange but was later acquired by Mani. He initiated this concept after understanding the convenience in delivering such information over a call instead of it being stored in a book. However the official establishment of the company was on standby as Mani was unable to make an investment of Rs. 15,000 for a land line service. The company later began with a seed capital of Rs. 50,000. With the reach of the internet increasing, Mani decided to go online with Justdial.com in 2007.

As of December 2015 Justdial had 10,198 employees. Justdial has a database of approximately 15.3 million listings and 346,000 paid listings as of June, 2015. Justdial's total revenue was Rs 171.33 crore at the end of the quarter ended December, 2015

IPO

On March 20, 2012, Justdial had obtained approval from Securities and Exchange Board of India (SEBI) for its proposed Initial public offering (IPO). Justdial had initially filed its draft red herring prospectus with SEBI to raise Rs 360 crore in August 2011,. However the company shelved its plans in June 2012, due to a sharp fall in the markets and raised Rs 327 crore from its existing private equity investors, Sequoia Capital and SAP Ventures, with Sequoia Capital leading the funding round with a Rs 305 crore investment.

In August 2012, Justdial had re-filed its DRHP with SEBI and was looking to sell 9.55 million shares of face value Rs 10 each, in return for 13.53% stake in the company. This includes 4.03 million shares held by SAIF Partners, 2.51 million shares held by Tiger Global Four JD Holdings, 1.55 million shares held by Tiger Global Five Indian Holdings, 1.04 million shares held by Sequoia Capital, 347,142 shares held by EGCS and 64,779 shares held by SAP Ventures.

In May 2013, Justdial went public on May 20 at a price between Rs. 897-898. Out of 17.5 million shares, 13.5 million shares were offered to the public and 3,936,925 shares have been subscribed to by 15 Anchor Investors at Rs 530 per equity share, for a total of around Rs 208.65 crore. Justdial has reserved 75% of its IPO for institutional investors,15% for high-net-worth individuals (HNIs) and remaining 10% for retail investors. CRISIL has been assigned grade 5/5 to the proposed IPO of Justdial. This grade indicates that the fundamentals of the IPO are strong relative to other listed equity securities in India.

Unlike previous public offers, Justdial adopted a scheme "safety net" for retail investors proposed by the capital market regulator Sebi in 2012 where the company promoters assure that they will buy back shares from the retail applicants at the IPO price, if its stock falls sharply during the first six months after listing. At the end of day 1, a majority of the bids came from Foreign Institutional Investors (65,87,275 shares), around 72% of total shares on offer for QIBs. Retail investor appetite was low, with only 14% (246,200) of shares, whereas 1,749,745 shares were offered to them. HNIs bid for only 3750 shares of the 2,624,618 shares offered for them.

At the end of day 2, Retail investor participation increased almost fivefold after a fairly low key participation on day one of Justdial’s IPO: Total bids from retail investors increased to 1,224,725 shares from 246,200 shares at the end of day 1. Thus, around 70% of the total 1,749,745 shares that retail investors were allowed, have been bid for, and most of them have been at the cut-off price. Participation from Qualified Institutional Buyers (FII’s and Mutual Funds) also increased, with Mutual Funds finally participating, but bidding only for 56200 shares. FII’s have bid for 8141850 shares in all.Participation from Corporates and Individuals other than retail investors has been insipid.All in all, around 69.62% of the shares on offer have been bid for, mostly by QIBs, which sets the stage for day 3. On day 3 of issue, Justdial IPO was over-subscribed 11.63 times.

The company’s opening price on listing was Rs. 590 on the NSE, which was at about a 18.1 per cent premium to the IPO price of Rs. 483 for retail investors. Within six months of its listing, Just Dial gained 172 per cent return. The stock hit an all-time high of Rs. 1,894.70 on August 5, 2014, but a year later, it was reduced to triple digits.

Business & Services

Just Dial's core business is local search services. This business faces tough competition from companies such as Zomato and Practo. The company, however, states that “its exposure to any particular category is not more than 2-3% and it has not seen an impact on categories like doctors or on-demand services, which remain healthy for the company”. Other services labeled as "Search Plus Service" offer online transactions on web and app. However, many specialized apps are taking precedence in the verticals.