Just Dial informed on 27-04-20 that the Board of Directors of the Company at its meeting to be held on April 30, 2020 will consider the proposal for Buy-back of shares. Just Dial Buyback as approved by its Board entails a proposal to buyback of up to 31,42,857 (Thirty One Lakhs Forty Two Thousand Eight Hundred and Fifty Seven) Equity Shares at a maximum price of Rs. 700/- (Rupees Seven Hundred Only) per Equity Share (for an aggregate amount of maximum up to Rs. 220,00,00,000/- (Rupees Two Hundred Twenty Crores Only). Just Dial Buyback represents approximately 4.84% of the total paid up equity share capital of the Company and is on a proportionate basis under “Tender Offer” route.

Established in 1996, Just Dial Limited is India’s leading local search engine offering a wide array of informational and transactional services through multiple platforms.

See List of all Forthcoming and Recent Buybacks

Just Dial Buyback : Key Info

Particular / Year
Buy Back 2020
Buy Back first intimation27-04-20
Market Price a day prior to this348.55
Market Price a day after this384
Buy Back BM30-04-20
Buy Back Type Tender Offer
Buy Back Price700
Market Price on day of Board meeting for Buyback389.8
Market Price a day after Buyback Board Meeting406
% Premium on Market Price79.58%
Buy Back Size in Rs. Crore220.00
Buy Back Size ( Shares)3,142,857
Total Shares64,903,692
% Buyback of Equity4.84%
shares Retail471,429
Equity Capital in crore64.90
Face Value of Share in Rs.10
Record Date
Buy Back Issue date
Shares on RD
Buyback Entitlement
Shares Tendered
Tendering ratio
Retail response
Aceeptance %

Just Dial Earlier Buybacks : Key Info

Board Meeting
20-07-18
04-06-15
Buy Back Type Tender Offer Tender Offer
Buy Back Price8001550
MP befo BM5801109
MP aft BM555.71112
% Premium on MP37.93%39.77%
Buy Back Size- Rs. Cr220.00164.53
Buy Back Size (Shares)2,750,0001,061,499
Equity Capital in cr67.3970.52
Tot No. of shares67,385,97570520004
Face Value 1010
% Buyback4.08%1.51%
Record Date12-10-184-12-15
MPon RD 870.2
Buy Back Issue date18-12: 01-01-1925/2/16 to 10/3/16
Indicative MP aft buyback700
Shrs reserved for Retail 412,500159,225
Retail investors on RD 5186336,676
Shares with Retail on RD3,593,7551,522,889
Buyback Entitlement11.48%10.46%
Shares Tendered by retail1827228524360
Tendering ratio50.84%34.43%
Aceeptance Ratio20.9%30.37%
End Date10-01-19
Time taken in months5.8

Just Dial Buyback : Acceptance Ratio Possibilities

This framework is based on estimation of number of Just Dial shareholders who hold around 500 number of shares. To this we have added estimates/approximations for
1) Few additional purchase of Shares by existing shareholders with eye on earning additional returns through buyback.
2) Purchase of Shares by Arbitrage investors and trends in earlierJusr dial Buybacks.

Based on assumptions indicated above and considering a moderate tendering ratio, under normal circumstances Just Dials Buyback could have entitlement Ratio of 20-20% . Acceptance ratio could vary depending on price trend exhibited by stock and number of new arbitrage investors.

Return Scenarios: Just Dial Buyback

The absolute returns (Profit/Loss) that may accrue to an Investors/Arbitrage trader are a function of Percentage Acceptance Ratio and Price Post Buyback. Investors may kept in mind that stock markets are quite volatile at this juncture and th highly uncertain times withy threat of COVID19 looming large over all industries. We have depicted some scenarios for Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and some possible Price Post Buyback .scenarios.

Shares Bought
500
Nos.
Buyback Price700
Price (Live)405
Investment (Rs.)202500
Absolute Returns %
MP Aft Buybk
Acceptance %240265290
20%-18.02%-13.09%-8.15%
25%-12.35%-7.72%-3.09%
30%-6.67%-2.35%1.98%
35%-0.99%3.02%7.04%

About Just Dial

  • Just Dial Limited is a local search engine company.
  • It was founded by VSS Mani and its headquarters is in Mumbai.
  • Just Dial has strong pan-India network, spread across 11 branches.
  • The services provided on company’s platforSm of ‘Search Plus’ may be broadly classified under:
    • Ordering services
    • Scheduling services
    • Travel/ leisure services
    • Buying products/ price discovery through reverse auction.
  • Just Dial offers its services across various platforms, such as voice, Web, mobile Internet and mobile applications.
  • The Company apart from providing search and related services, is also engaged in other information service activities.

Just Dial Price Trend, Summary of Financials

Financial Overview

Market Cap- Rs. Cr2,267
CMP in Rs.350
Revenue – cr. (TTM)950.42
Net profit-cr (TTM)206.85
Equity Share Capital64.87
Face Value10
EPS TTM31.89
Price / Earning (PE)10.96
Book Value175.68
Price / BV1.99
ROCE %21.93%
ROE  %15.77%
Sales 3 yr CAGR10.12%
Dividend Yield0.80%
Debt / Equity Ratio0.04
52 week  H/L 824.85 / 250.00

Assessment: Just Dial Buyback

  • Just Dial listed its shares on the stock exchanges in June 2013.  After commanding good valuations, the stock has remained in bouts of pressure in last few years.
  • Just Dial revenues have witnessed a flattish trend and it reported a flat performance in the last quarter.
  • Promoter holding in Just dial stands at 33.44 %.
  • Company has not been paying dividends but has been coming with buybacks through tender route on regular basis.
  • Just Dial earnings include an other income of Rs.133.81 Cr.
  • Just Dial is a debt free company.
  • There have been fears that Just Dial will loose its relevance and customers as search engines like Google target more and more small businesses. Just Dial also faces competition from Zomato & Practo. Some analysts have been of the view that Just Dial business model is outdated.  
  • Question marks on sustainability of Just Dial search business may continue to haunt Just Dial share price.
  • Last two buybacks from Just Dial took more than normal time with last buy back getting complete in about 6 months time
  • 1.73% of company’s equity shares are pledged.
  • Foreign Portfolio investors hold an impressive 42.53% shareholding in the company with Nalanda India equity fund holding 10.8%. Other investors include Goldman Sachs, Vanguard etc. Two mutual funds hold 14.03% stake in the company.
  • The buyback price being announced at a sufficient premium, the offer a fac looks attrasignificant correction from the levels at which Just Dial ruled at the time of buyback announcement and with significantly high buyback price of Rs.800, Iam inclined to take a risk in terms of small stake in Just Dial before the Record date for Just Dial Buyback. On the flip side, many mid cap stocks in IT are recently witnessing a sharp correction and overall market sentiment remains very poor. The outlook for the market continues to be hazy which can cast a shadow on expected returns in this Just Dial Buyback arbitrage opportunity.
  • Just Dial is in F&O whoch may provide some support to the share price in the immediate period post buyback.
  • I intend to participate in Just dial Buyback with a smal exposure. Will also be awaiting its annual results, the date for whlch has not been announced yet.
  • Just dial Buyback price indicated is maximum Rs. 700 which means it can be revised downwards if so warranted. In last buyback the company had given max. buyback price of Rs. 800 which finally carried through.
  • COVID-19 poses a big downward risk to business of Just Dial which depends a lot on SMEs and small business.

Updates:

  • JUSTDIAL: NSE to exclude F&O Contracts from July 31.

Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering and Management . Iam also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2). This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/ Buy Back/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.