Dial a Deal: RIL to Buy up 67% Stake in Justdial

Reliance Retail announced its second-largest acquisition till date, seeking to buy a stake of as much as 67% in Justdial for about $700 million or Rs. 5,222.8 crores, doubling down on its local commerce and payments foray. The move seeks to capitalize on the 30.4 million listings database of the homegrown search provider.

Reliance-already the largest organized retailer in the country-has agreed to buy a 15.62% stake from first- generation entrepreneur VSS Mani and his family through a secondary share purchase for Rs. 1,336 crores. Justdial will also be making a preferential allotment to Reliance Retail at Rs. 1,022.25 per share for a 25.3% stake that will infuse Rs. 2,164.88 crores into the company to help it take on competition. This will, in turn, trigger an open offer for an additional 26% of the company from minority shareholders.

A successful open offer will put the total payout at Rs. 5,222.8 crores. or $700 million. ET had reported about the imminent deal in its edition dated July 15.

The Mani family now owns 35.5% the company he founded 25 years ago, starting out as a phone- based service in 1996, listing local services, the company was a market leader in discovery, with a valuation of more than $2 billion in 2014, a year after listing. But over the years, it lost much of its sheen as a hyper-competitive consumer internet landscape and VC-backed rivals ate into market share with convenient transaction support, standardized services and superior user interfaces.

The current market capitalization of Justdial is Rs. 6,683.74 crores. it’s the market leader in the local search engine segment. S-ET

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