Just Dial jumps 17% on market debut: Here's all you need to know

Local search engine Just Dial rose as much as 19.2 percent in its stock market debut today after the company raised about Rs 950 crore in its IPOlast month in the country’s biggest listing so far this year.

At 11.51 am, the Just Dial shares were at621.55, up17.27 percent.

Here’s what you need to know about the Just Dial’s listing on the stock exchange:

Effective from Wednesday, June 5, 2013, the equity shares of Just Dial Ltd shall be listed and admitted to dealings on the BSE and the NSE.

[caption id=“attachment_843619” align=“alignright” width=“380”] At 11.51 am, the Just Dial shares were at 621.55, up 17.27 percent.[/caption]

The company has fixed the issue price at Rs 530 per share. It has also decided to offer a discount of Rs 47 on the issue price to retail investors.The price band for the issue was at Rs 470-543 per share. Just Dial’s issue, which was the largest offer by an Indian web-based and local search company, was subscribed almost 12 times. Besides, it is the biggest initial public offering (IPO) in calendar year 2013 so far.The Just Dial IPO drew a strong response from Foreign Institutional Investors (FIIs) and high net-worth individuals.

Just Dial will provide ‘safety net’ for retail investors. Under this, if the market value of the scrip falls below the issue price at any time during the scheme period, promoters will buyback shares at the sale price from original allottees. However, the buyback would be subject to a maximum of 1,000 shares per allottee.

However, despite the strong debut, investment bankers and analysts said Just Dial’s listing was unlikely to open up India’s moribund IPO market in the near term, given only a few medium-to-large sized issues are in the pipeline as the NSE index is up only 0.2 percent for the year. “Just Dial is a quality IPO and markets separate men from boys,” said Deven Choksey, Managing Director of K. R. Choksey Securities in Mumbai.

“The secondary market needs to be extremely strong for IPOs to benefit. So unless it is a unique IPO, it wouldn’t be successful.”

Just Dial’s IPO, in which the company’s founders and private equity investors including Sequoia Capital and Tiger Global sold some of their shares, was the biggest since Bharti Infratel Ltd’s IPO of about $750 million in December last year. Mumbai-based Just Dial, which offers search for local businesses through Internet and mobile platforms, sold 17.5 million shares through the IPO, or 25 percent of its total equity, which was subscribed 11.6 times. The search service provider’s IPO has attracted foreign banks, including Goldman Sachsand HSBC, as well as domestic institutional investors Birla Sunlife Trustee Co.

Citigroup and Morgan Stanley were the lead managers to the issue.

Founded by VSS Mani, the company, which started offering local search services in 1996 under the Just Dial brand, had raised Rs 208 crore by issuing shares to anchor investors, including Goldman Sachs and HSBC.

With inputs from agencies