Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd (RIL), has signed a definitive agreement to acquire a controlling stake in local search engine and e-commerce marketplace, Just Dial Ltd for about Rs5,720 crore.
In a statement, the company says, "Reliance Retail Ventures will hold 40.95% in Just Dial and would make an open offer to acquire up to 26.0% in accordance with takeover regulations. VSS Mani, founder of Just Dial will continue to lead Just Dial as managing director (MD) and chief executive officer (CEO)."
Reliance will use a combination of preferential allotment, a secondary purchase from VSS Mani and an open offer for up to 26% at Rs1,022.25 per share (offer price). The offer price is at a 4.5% discount to Friday’s closing stock price of Rs1,072.70. The first two will cost Rs3,500 crore and the open offer as much as Rs2,222 crore rupees in cash.
Isha Ambani, director of Reliance Retail says, “The investment in Just Dial underlines our commitment to new commerce by further boosting the digital ecosystem for millions of our partner merchants, micro, small and medium enterprises (MSMEs). We look forward to working with the highly experienced management team of Just Dial as we further expand the business going forward.”
On Friday evening, Just Dial’s board approved the preferential issue of 21.2 million shares at Rs1022.25 per share to Reliance Retail.
Reliance Retail has bought out VSS Mani’s 15.62% stake (13.1 million shares) in the company at Rs1,020 per share.
The move comes as Mukesh Ambani’s conglomerate is looking to bolster its digital offerings bouquet. The acquisition is also expected to further boost Reliance’s retail business in India.
Mumbai-based Just Dial was established in 1996 and began by offering users a simple phone search service where users called to locate the nearest salon or repair shops or florist to deliver a bouquet. It now offers local information and buying options for everything from catering to dance classes and electronics repair shops.
According to the Just Dial website, it offers services in more than 250 Indian cities and claims to have a database of 30.4 million listings as of 31st March. It provides information across platforms that include a website, mobile apps, texts and phone.
In November 2020, the Reliance group acquired a majority holding in Urban Ladder, an online furniture seller. This followed stake purchases in Zivame, a lingerie maker, and Netmeds, a digital pharmacy.