Hyperlocal Search Engine JustDial Denies Buyout Talks With Google

Mumbai-based hyperlocal search engine JustDial has denied holding acquisition talks with global Internet giant Google. Speculations emerged earlier today when an Indian media publication reported that the subsidiary of Alphabet was looking to buy JustDial’s business.

Immediately after the reports surfaced, JustDial’s share price jumped 19.79% to $8.4 (INR 549.85) from the opening price of $7.7 (INR 504.90). The intra-day gains settled at 9% reaching a share price of $7.6 (INR 500.30).

The original report stated that the two companies have been in talks for the last several months. Quoting an investment banker close to the development,  the report said, “It may take some more time before the discussions are finalised.”

If the deal had materialised, it would have been Google’s second acquisition in India after Halli Labs, a Bengaluru-based AI startup that was bought by the Internet giant in July this year.

JustDial, however, has since dismissed speculations about a potential buyout, adding, “We would like to clarify that as of now there is no proposal with respect of the acquisition of our business of Just Dial by Google. Further, when there is any development to disclose, Just Dial shall do so at an appropriate time as per Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.”

As expected, the hyperlocal search company’s share price dropped to $7.1 (INR 467.05) once JustDial’s clarification was made public.

The company recently announced its financial and operating results for the fiscal quarter ending on September 30, 2017, according to which it saw a net profit of $5.7 Mn (INR 37.5 Cr), claiming a 26.5% Y-o-Y rise for Q2 FY 18.

However, net profit declined by 1.8% overall in comparison to $5.8 Mn (INR 38.2 Cr) in the last fiscal year. As per its earnings release, the company generated a total operating revenue of $30 Mn (INR 194.5 Cr); up by 7.9% Y-o-Y from the same quarter last year.

JustDial was founded in 1994 by VSS Mani. The official website was launched in 2007. It is a local search firm that provides both B2C and B2B listings of small and medium businesses across 240 cities in India. The search service is available to users across multiple platforms, such as the Internet, over the telephone (voice) and text (SMS).

In January 2016, JustDial raised $18 Mn (INR 120 Cr) from Singapore-based Private equity investment firm Nalanda Capital. With the investment, Nalanda’s total stake in the hyperlocal search company increased by 2% to 7.58%. The other two major shareholders of JustDial are Sequoia Capital and SAIF Partners. Tiger Global, EGCS and SAP Ventures have also invested in the company.

How JustDial’s IPO Has Fared Over The Years

The hyperlocal search engine opened its IPO in 2013, which at the time was hailed as the biggest issue since Bharti Infratel Ltd’s IPO in December 2012.

At its peak, the share price of the local search engine reached $9.5 (INR 619) in March last year, before slumping to $5 (INR 319) in December. The numbers have improved slightly in the last couple of months, with its stock fetching $7.3 (INR 477.95) on the BSE as on Monday (November 6).

Recently, in July, the board approved the search company’s open market buyback proposal. As part of the buyback, which opened on August 9 and closed on September 25, JustDial bought 2.2 Mn of its own equity shares at $5.7 (INR 374.18) apiece, aggregating $12.8 Mn (INR 83.85 Cr) in the process.

If the acquisition deal did go through, it would have given Google access to the hyperlocal search engine’s database of 19.8 Mn active listings. Furthermore, it would have infused some much-needed funds into JustDial, which would have in turn helped the company stay afloat amidst increased competition and declining profits.

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